Worse-than-expected forecasts knock Lowe's shares down 💡

Lowe's (LOW.US) shares are losing nearly 3% ahead of the opening of today's Wall Street session following the release of Q4 2023 results. Although results for the period came in better than expected, the outlook itself is for lower-than-expected EPS and a stronger decline in comparable sales. The company communicates that consumer demand for the company's products remains subdued and that the process of rebuilding momentum will take some time.

FOURTH QUARTER RESULTS

• Comparable sales -6.2%, forecast -7.13% 
• EPS $1.77 vs. $1.58 y/y, forecast $1.68
• Net sales $18.60bn, -17% y/y, forecast $18.46bn
• Gross profit $6.03bn, -17% y/y, forecast $5.96bn
• Gross margin 32.4% vs. 32.3% y/y, forecast 32.2%
• SG&A costs as a percentage of revenue 21% vs. 22.9% y/y, forecast 21%
• Operating margin 9.07% vs. 7.59% y/y, forecast 9.04%
• Total number of locations 1,746, forecast 1,746
• Retail space 194.9 million sq ft, forecast 195.96 million sq ft

2025 FORECAST

• Company assumes EPS of $12.00 to $12.30, forecast $12.96
• Comparable sales -2% to -3%, forecast -1.14%
• Operating margin 12.6% to 12.7%,forecast 13%.
• Expected capital expenditure of approximately $2 billion, forecast $1.94 billion
• Anticipated total sales of $84bn to $85bn, forecast $85.61bn

COMMENTS

• Comparable sales for the quarter were down 6.2% due to a slowdown in demand for DIY products and an unfavourable January winter, while comparable sales of Pro customers were flat for the quarter.
• "We remain confident in the long-term strength of the DIY market," - said the CEO.

The company's shares lost nearly 3% before the opening of the session. Source: xStation