What to look for when Lowe’s (LOW) reports Q2 2024 earnings results

Shares of Lowe’s Companies, Inc. (NYSE: LOW) dropped over 1% on Monday. The stock has gained over 4% year-to-date. The home improvement retailer is scheduled to report its second quarter 2024 earnings results on Tuesday, August 20, before market open. Here’s what to expect from the earnings report:

Revenue

Analysts are projecting revenue of $23.9 billion for Lowe’s for Q2 2024. This compares to sales of $25 billion reported in the same period a year ago. In the first quarter of 2024, sales decreased 4% year-over-year to $21.4 billion.

Earnings

The consensus estimate for Q2 2024 EPS is $3.97, which compares to EPS of $4.56 reported in the year-ago quarter. In Q1 2024, EPS decreased 18% YoY to $3.06.

Points to note

On its Q1 quarterly call, Lowe’s said it expects comparable sales for the second quarter to be roughly in line with the first quarter. Comparable sales declined 4.1% in Q1. The company saw continued pressure in Do-It-Yourself (DIY) bigger ticket discretionary spending last quarter and this is expected to persist in the second quarter as well.

Last quarter, comparable transactions decreased 3.1% as homeowners continued to put off larger discretionary projects. Inflationary pressures are likely to have forced customers to take on smaller unavoidable projects rather than large-scale renovations in the second quarter as well.

Lowe’s is focusing on driving higher sales and better engagement in the Pro customer segment, which has remained resilient against the current challenging backdrop. The company is working on expanding its share with the small to medium-sized pros such as repair and remodel contractors, who are estimated to represent half of the $500 billion Pro market. The Pro market provides significant opportunity for the company.

The company’s investments in its Total Home Strategy and its perpetual productivity improvement (PPI) initiatives are likely to have yielded benefits in Q2.