Lowe’s Q2 Earnings Report: Retailer Hits All The Right Marks With Home Improvement

Lowe’s (LOW) has released its second-quarter earnings report, showing an increase in revenue and earnings, which sent its stock soaring on Wednesday.

The Q2 earnings report from Lowe’s showed net earnings of $1.7 billion; up from the $1.5 billion reported in the second quarter of 2018. Diluted EPS was $2.14 for the quarter and $1.86 in Q2 of last year.

The company did have $14 million in pre-tax operating losses from the wind-down of its Mexico retail operations, but excluding the losses said it saw an adjusted diluted EPS increase of 3.9 percent to $2.15; up from the adjusted diluted EPS of $2.07 reported last year during the same time period.

Sales for the company increased by 0.5 percent to $21 billion; up from $20.9 billion in Q2 2018 while comparable sales showed a growth of 2.3 percent for the quarter. Lowe’s U.S. home improvement business comparable sales were up 3.2 percent.

“We capitalized on spring demand, strong holiday event execution and growth in Paint and our Pro business to deliver strong second-quarter results,” Marvin R. Ellison, Lowe’s president and CEO said. “Despite lumber deflation and difficult weather, we are pleased that we delivered positive comparable sales in all 15 geographic regions of the U.S. This is a reflection of a solid macroeconomic backdrop and continued momentum executing our retail fundamentals framework,”

“Our transformation is ongoing, and our future is bright. We are confident that we are on the right path to capitalize on solid demand in a healthy home improvement market and generate long-term profitable growth,” he added.

Lowe’s guidance for fiscal 2019 includes a sales increase of approximately 2 percent with comparable sales growth of 3 percent. The company expects its operating income to increase by 310 to 340 points while its adjusted operating income is estimated to go up by 20 to 50 points.

Lowe’s also anticipates that it will repurchase $4 billion worth of stock by year-end and said it expects its diluted EPS to range from $5.54 to $5.74 for fiscal 2019 with an adjusted diluted EPS of $5.45 to $5.65. The company repurchased $1.96 billion of stock in the second quarter of 2019 and paid $382 million in dividends.

Lowe’s has 2,003 stores in the U.S. and Canada and said it filled more than 14,000 positions at these stores since July 1.

Shares of Lowe's stock were up 9.76 percent as of 11:59 a.m. ET on Wednesday.