Tech

Lowe's profit and margins miss lowest Wall Street estimate, shares tumble

Lowe's profit and margins miss lowest Wall Street estimate, shares tumble

Same-store sales, however, rose 4.1 percent, topping market expectations.

For the full fiscal year 2017, Lowe's net earnings were $3.4 billion, compared to net earnings of $3.1 billion in the 53-week of fiscal 2016.

Lowe's Companies Inc's (LOW.N) quarterly profit and margins fell well short of Wall Street estimates on Wednesday as the No. 2 US home improvement chain's investments to convert shoppers' visits into sales did not pay off as much as expected.

Analysts expect Lowe's to report fourth-quarter earnings per share of 86 cents, which would match the company's results from a year earlier.

BTIG analyst Alam Rifkin pointed to the impact of last year's hurricanes across Florida and Texas, where Lowe's has a large number of stores, as one reason for that squeeze.

The company's shares tumbled 9 percent after Lowe's forecast a drop in margins this year - due to heavy investment in a very competitive USA market.

More news: PlayStation Plus March 2018 Lineup Features Ratchet & Clank, Bloodborne

"As we enter 2018, we are working diligently to improve execution with a focus on conversion, gross margin, and inventory management." said Niblock.

Lowe's net sales fell almost 2 percent to $15.49 billion, but topped estimates of $15.33 billion.

"It's just that the lion's share of growth will continue to flow to Home Depot, rather that its smaller rival", Saunders said. Its adjusted earnings of 74 cents per share were well below analysts' estimate of 87 cents. "But as the dust clears today, I think there could be a positive in this [earnings report]". The outside pressure should move Lowe's toward being "a much more aggressive" company, as it repositions itself in the market and the home improvement category, he said. The North Carolina company launched its DIY apps as well as the augmented-reality assistants to meet the needs of a tech-savvy audience and young generation.

Operating margins also dropped and Lowe's said it expected a drop of about 30 basis points this year.

Also, the company announced on Wednesday a deeper partnership with Sherwin-Williams, making Lowe's the sole national home retailer of certain paint brands outside of Sherwin-Willaims stores.

As of this week Tuesday, the close market share had gone high by 25 percent from a year ago.


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