Shares of Lowe’s Companies Inc. (LOW - Analyst Report) were up 2.4% in pre-market trading after the company posted strong results for the fourth quarter of fiscal 2014, wherein both the top and the bottom lines surpassed the Zacks Consensus Estimate.
An improving job scenario and falling gasoline prices boosted consumers’ disposable income, allowing them to undertake home improvement projects.
The company’s earnings of 46 cents per share were a couple of cents ahead of the Zacks Consensus Estimate and increased 48.4% from adjusted earnings of 31 cents reported in the prior-year quarter.
Lowe's Companies Inc. - Earnings Surprise | FindTheBest
Quarterly revenues of $12,540 million easily beat the Zacks Consensus estimate of $12,292 million, while increasing 7.6% year over year. Comparable-store sales (comps) increased 7.3% on a consolidated basis in the quarter whereas U.S. comps grew 7.4%.
In dollar terms, gross profit rose 7.5% year over year to $4,346 million, whereas gross profit margin remained almost unchanged mainly due to increase in cost of sales.
Other Financial Aspects
Lowe’s ended the quarter with cash and cash equivalents of $466 million, long-term debt (excluding current maturities) of $10,815 million and shareholders’ equity of $9,968 million.
During the quarter, the company repurchased $1 billion worth of its common stock and distributed $225 million as dividends, bringing the total count to $3.9 billion worth of stock repurchases and $822 million as dividends for the fiscal.
Fiscal 2015 Outlook
Lowe’s initiated its fiscal 2015 guidance. The company expects sales growth of 4.5%–5% as against 5.3% registered in fiscal 2014.
Comps, on a consolidated basis, for the year are expected to grow in the range of 4%–4.5% compared with 4.3% growth registered in fiscal 2014.
Further, Lowe’s expects earnings for fiscal 2015 to be $3.29 per share compared with $2.71 per share earned in fiscal 2014. Currently, the Zacks Consensus Estimate for the fiscal stands at $3.27 per share, which is likely to be revised upwards.
Moreover, the company intends to open 15-20 home improvement stores and hardware stores in the fiscal. As of Jan 30, 2015, the company operated 1,840 stores in the United States, Canada and Mexico.
Operating margin is expected to expand by nearly 80 to 100 bps and effective tax rate is projected to be almost 38.1%.
Other Stocks to Consider
Currently, Lowe’s carries a Zacks Rank #2 (Buy). Better-ranked stocks in the retail industry space include Restoration Hardware Holdings, Inc. (RH - Snapshot Report), Casey's General Stores, Inc. (CASY - Snapshot Report) and Kirkland's Inc. (KIRK - Analyst Report). All these stocks carry a Zacks Rank #1 (Strong Buy).
Get the latest research report on LOW - FREE
Get the latest research report on KIRK - FREE
Comments
Log in or sign up to join the conversation.