Lowe’s Earnings Climb 37% as Sales Surge in Most Categories
Lowe’s Cos. said Monday that fiscal fourth-quarter profit rose 37%, the biggest gain in three years, as Americans spent more on remodeling kitchens and bathrooms. Lowe’s shares climbed the most in 2 1/2 years.
Net income at the home-improvement retailer jumped to $695 million, or 87 cents a share, from $508 million, or 64 cents, a year earlier. Revenue increased 26% to $10.8 billion in the quarter ended Feb. 3, the Mooresville, N.C.-based company said.
Sales at stores open at least a year, a key measure of retail health, gained 7.8% as customers bought cabinets and countertops and three hurricanes forced homeowners to make repairs.
Revenue growth is outpacing that of rival Home Depot Inc. as Lowe’s opens stores in metropolitan areas including Phoenix and Chicago. The company forecast full-year profit above analysts’ estimates.
Sales at stores open at least a year increased in 19 of 20 product categories, Chief Executive Robert Niblock said. Same-store sales of heating products declined because of unusually warm winter weather, he said.
Shares of Lowe’s surged $3.78, or 5.8%, to $69.30. Its fourth quarter in 2005 had one more week than 2004’s fourth quarter.
For the fiscal year ending Feb. 2, 2007, Lowe’s forecast that profit would rise to $4.03 to $4.13 a share. The consensus estimate from analysts had been $3.95, according to Thomson Financial. The company affirmed its sales forecast of a 13% to 14% gain.
Lowe’s said revenue would rise as much as 20% this quarter, which ends May 5, and profit would be in the range of 92 cents to 94 cents. Analysts had estimated 88 cents. Second-quarter sales will increase as much as 14% and profit will be $1.22 to $1.25, Lowe’s said.
For the year, Lowe’s profit rose 27% to $2.78 billion, or $3.46 a share, as sales gained 19% to $43.2 billion. Analysts had estimated profit of $3.39. Same-store sales climbed 6.1% in the year.