Lowe’s (LOW) today reported lower-than-expected Q1 earnings, sending its shares down as much as 8% during the pre-market trading. The Mooresville, North Carolina-based company reported almost 70% jump in earnings to $1.19 per share but it came below the analysts’ estimate of $1.22 per share.
The new revenue recognition accounting standard helped the home improvement retailer post a 3% rise in revenue to $17.4 billion during the quarter. This also failed to meet the consensus estimate of $17.44 billion. Comparable sales grew 0.6%, missing street estimate of 3.06% growth.
“We drove solid performance in indoor categories and continued to grow our sales to Pro customers. However, prolonged unfavorable weather across geographies led to a delayed spring selling season, which impacted results in outdoor categories. Spring has now arrived and we are encouraged by strong sales in the month of May,” said Robert Niblock, CEO.
The company, which recently tapped JCPenney (JCP) CEO Marvin Ellison as its new CEO, expects sales to increase approx 5% in fiscal 2018. Comparable sales are expected to increase approx 3.5% during this period. For the fiscal year ending Feb. 1, 2019, the company expects EPS of $5.40 to $5.50.
Analysts hope that the new CEO can help revive Lowe’s business and strengthen the company’s performance, like Home Depot.
As of May 4, 2018, Lowe’s operated 2,154 home improvement and hardware stores in the US, Canada, and Mexico, representing 215.1 million square feet of retail selling space.
A similar unfavorable weather condition had plagued rival Home Depot (HD) also. After the earnings results, share price of Home Depot fell over 1% due to weakness in comparable sales growth. During Q1, Home Depot reported EPS of $2.08 and revenue of $24.95 billion.