Lowe’s (LOW) Q4 2024 earnings

Lowe’s topped Wall Street’s quarterly earnings and revenue expectations on Wednesday and said its sales slump should end in the year ahead.

The home improvement retailer said it expects full-year total sales to range from $83.5 billion to $84.5 billion, which on the upper end would be higher than its total revenue of $83.67 billion for fiscal 2024. It said it expects comparable sales to be flat to up 1% year over year and earnings per share to range from approximately $12.15 to $12.40.

On the company’s earnings call, CEO Marvin Ellison stressed that Lowe’s still faces “a challenging home improvement market.”

He said high mortgage rates have created “a significant gap between today’s rates for homebuyers and the lower rates many homeowners currently enjoy,.” That’s led to a “lock-in effect” that’s kept consumers from buying and selling, he said.

Even so, he said, Lowe’s has pressed ahead with investments in its own strategy, such as attracting more business from home professionals, so it is “well-positioned to capitalize on the home improvement recovery and take share when the market inflects.”

Here’s what the company reported for the fiscal fourth quarter compared with what Wall Street expected, based on a survey of analysts by LSEG:

• Earnings per share: $1.93 adjusted vs. $1.84 expected
• Revenue: $18.55 billion vs. $18.29 billion expected

Lowe’s shares rose nearly 2% on Wednesday, after the company’s leaders said they expected sales trends to improve, but still be roughly flat from last year.

In the three-month period that ended Jan. 31, Lowe’s net income was $1.13 billion, or $1.99 per share, compared with $1.02 billion, or $1.77 per share, in the year-ago period. Revenue fell from $18.60 billion in the year-ago quarter.

Lowe’s adjusted earnings per share figure excluded an $80 million pretax gain associated with the 2022 sale of its Canadian retail business, which added 6 cents per share to fourth-quarter earnings.

Investors are looking for signs that the home improvement market is picking up again. Slower housing turnover and higher borrowing costs have kept some customers on the sidelines. Lowe’s net sales for the 2024 fiscal year totaled $83.67 billion, down 3% from the prior fiscal year.

In the fiscal fourth quarter, trends looked better. Comparable sales rose 0.2%, boosted by online gains, high single-digit growth among home professionals and sales related to rebuilding efforts after hurricanes Milton and Helene. That slightly positive metric ended eight consecutive quarters of comparable sales declines. It also exceeded Wall Street’s expectations. Analysts had anticipated a 1.8% decline in comparable sales.