Lowe’s Companies, Inc. (NYSE: LOW), a provider of home improvement services, Wednesday said its second-quarter earnings rose 4%, aided by solid comparable-store sales. The results also topped the market’s expectations. Lowe’s stock gained sharply early Wednesday following the announcement.
At $21 billion, net sales were up 1% from the second quarter of 2018 and slightly above analysts’ consensus estimate. Total comparable sales moved up 2.3% and US comparable-store sales advanced 3.2%.
During the quarter, adjusted earnings rose to $2.15 per share from $2.07 per share in the corresponding period of last year, surpassing the market’s prediction. Unadjusted profit was $1.7 billion or $2.14 per share, compared to $1.5 billion or $1.86 per share last year.
“We capitalized on spring demand, strong holiday event execution and growth in Paint and our Pro business to deliver strong second-quarter results. Despite lumber deflation and difficult weather, we are pleased that we delivered positive comparable sales in all 15 geographic regions of the U.S,” said chief executive officer Marvin Ellison.
Encouraged by the positive July-quarter results, the management currently expects full-year 2019 sales to grow about 2% year-over-year, aided by a 3% increase in comparable-store sales. Adjusted earnings are forecast to be in the range of $5.45 per share to $5.65 per share and unadjusted earnings between $5.54 per share and $5.74 per share. Full-year operating income, as a percentage of sales, is seen growing by 310-340 basis points.
During the three-month period, Lowe’s repurchased $1.96 billion of its shares and paid $382 million in dividends. At the end of the quarter, the company had 2,003 home improvement and hardware stores in the United States and Canada.
Also see: Lowe’s Q1 2019 Earnings Conference Call Transcript
Earlier this week, rival home furnishing firm Home Depot (HD) reported a 1.2% increase in second-quarter sales to $30.8 billion, which however fell short of estimates. Total comparable sales grew 3%, lifting earnings by 4% to $3.17 per share.
Shares of Lowe’s Companies rose sharply during Wednesday’s pre-market trading, after closing the previous session notably higher. They have gained 8% in the past twelve months.