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Lowe’s Companies, Inc. (NYSE: LOW) reported its financial results for the second quarter of 2024, revealing a mixed performance. The home improvement retailer posted net earnings of $2.4 billion and diluted earnings per share (EPS) of $4.17 for the quarter ended Aug. 2, 2024.

This marks a decline from the previous year’s second quarter, where diluted EPS stood at $4.56. The company recognized a $43 million pre-tax gain associated with the 2022 sale of its Canadian retail business, which positively impacted the second quarter diluted EPS by $0.07. Excluding this gain, the adjusted diluted EPS for the quarter was $4.10.

Total sales for the quarter were $23.6 billion, down from $25.0 billion in the prior-year quarter. Comparable sales decreased by 5.1%, driven by continued pressure in DIY bigger ticket discretionary spending and unfavorable weather conditions that adversely impacted sales in seasonal and other outdoor categories.

However, these declines were partially offset by positive comparable sales in the Pro and online segments. The decrease in comparable sales reflects the broader challenges facing the retail sector, particularly in discretionary spending categories.
 

LOW Beats EPS Expectations in Q2, Falls Short in Revenue

When comparing the current performance against expectations, Lowe’s actual results were slightly above analyst forecasts for EPS but fell short in terms of revenue. Analysts had projected an EPS of $3.96, whereas Lowe’s reported a diluted EPS of $4.17 and an adjusted diluted EPS of $4.10.

This indicates that the company’s profitability was better than expected, even though it was down from the previous year. The adjusted EPS, which excludes the one-time gain from the Canadian business sale, still surpassed the analyst expectations by $0.14.

On the revenue front, Lowe’s fell short of the anticipated $23.93 billion, posting $23.6 billion instead. This shortfall can be attributed to the 5.1% decrease in comparable sales, which was driven by external factors such as continued pressure on DIY bigger ticket discretionary spending and unfavorable weather.

Despite these challenges, the company managed to show resilience in its Pro and online sales segments, which provided some cushion against the overall decline in revenue.
 

Guidance

Lowe’s has updated its full-year 2024 outlook to reflect the current market conditions and its performance in the second quarter. The company has adjusted its expectations to account for the continued pressure on discretionary spending and the impact of unfavorable weather conditions.

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