NEW YORK (AP) — Lowe’s Cos on Wednesday reported weaker-than-expected sales for its fiscal fourth quarter and offered an annual forecast that came below Wall Street expectations.
During a call with analysts, Lowe’s CEO Marvin Ellison blamed the sales shortfall on the timing of its marketing campaign that didn’t align with the compressed holiday season. It’s e-commerce website is also under major renovation. But Lowe’s said that it’s relaunching its website this spring and said that it is working to update the stores with better signage and other merchandising changes.
Shares in the company based in Mooresville, North Carolina, closed down more than four per cent on Wednesday.
The report comes a day after strong results from rival Home Depot, which reported better-than-expected quarterly profits and sales.
The contrasting quarterly performances highlights the increasing competition between Home Depot and Lowe’s, which is in the process of an overhaul under Ellison.
Ellison, a one-time Home Depot executive who took the top job at Lowe’s in mid 2018, is trying to reshape the culture at Lowe’s, which has been a distant second to Home Depot in the sector for a while. Ellison has been focussing on getting Lowe’s back to the fundamentals of retailing, like making sure the right items are in stock and improving customer service.
“Though we are only one year into a multiyear plan, we made significant progress transforming our company and believe we are well positioned to capitalise on solid demand in a healthy home improvement market,” Ellison said in a statement.
Lowe’s reported fiscal fourth-quarter net income of USD509 million, after reporting a loss in the same period a year earlier.
The company said it had profit of 66 cents per share. Earnings, adjusted for non-recurring costs, came to 94 cents per share.
The results beat the average Wall Street estimate of 91 cents per share, based on an analyst survey by Zacks Investment Research.
The home improvement retailer posted revenue of USD16.03 billion in the period, missing Street forecasts.
Ten analysts surveyed by Zacks expected USD16.15 billion.
Overall, sales at stores opened at least a year rose 2.5 per cent for the quarter. The figure for the United States (US) home improvement business increased 2.6 per cent. Analysts were expecting 3.2 per cent for the quarter, according to FactSet.
Lowe’s expects full-year earnings in the range of USD6.45 to USD6.65 per share. That’s below the Street USD6.67 per share estimate, according to FactSet.