Mooresville-based Lowe’s reported fourth-quarter financial results Wednesday that topped Wall Street expectations – a sign of momentum at a time when the local home improvement retailer has been trimming its workforce to become more efficient.
Rising home values and relatively low mortgage rates have provided a lift to Lowe’s and its chief rival, Home Depot, the Atlanta-based company that has consistently outperformed Lowe’s thanks to its business for professional customers.
For the three months ending Feb. 3, Lowe’s reported earnings of $663 million, up from $11 million during the same period a year ago. Excluding certain items, including severance-related costs from recent layoffs, earnings per share rose to 86 cents, up from 59 cents in the fourth quarter of 2015 and above the 79 cents estimated by Thompson Reuters analysts.
Net sales rose to $15.78 billion from $13.24 billion the same quarter in 2015. Analysts had expected sales of $15.39 billion. Sales at stores open at least one year – a key industry metric – rose 5.1 percent, above the 2.4 percent rise expected by analysts.
Lowe’s improved earnings report sent its shares up nearly 5.7 percent to $78.58 in early trading.
Last week, Home Depot, the country’s biggest home-improvement retailer, reported a fourth-quarter profit that surged nearly 19 percent from the same period last year. Both earnings and sales topped Wall Street expectations, thanks to more customer visits and higher average sales.
“We’ve entered 2017 well-positioned to capitalize on a favorable macroeconomic backdrop for home improvement by continuing to execute on our strategies to expand customer reach and develop capabilities to anticipate and support their needs,” CEO Robert Niblock said in a statement.
Lowe’s most recent earnings come at a turbulent time for the company‘s workers. Last week, Lowe’s announced the layoffs of 430 people at its Mooresville headquarters, and 70 support staffers in Wilkesboro. About a month ago, Lowe’s cut about 2,400 full-time positions across its U.S. footprint as part of a rollout of a new store staffing model. CNBC contributed.
Katherine Peralta: 704-358-5079, @katieperalta
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