Lowe's comp sales, profit beat as hurricanes drive demand

[November 21, 2017]   By Sruthi Ramakrishnan

(Reuters) - Lowe's Cos Inc's third-quarter comparable sales topped analysts' estimates on Tuesday, helped by hurricane-driven demand for its building materials and a push on the volume of business it does with professional contractors.

Compared with the bumper results last week for larger rival Home Depot Inc <HD.N>, the roughly $1 billion or 6.6 percent rise in Lowe's sales was not enough to send its shares higher before the bell.

Sales at Lowe's stores open at least a year increased 5.7 percent in the quarter ended Nov. 3, above the average analyst estimate of 4.6 percent growth, according to Thomson Reuters I/B/E/S.

The No. 2 U.S. home improvement chain earned $1.05 per share in the quarter. Analysts had expected earnings of $1.02 per share.

Hurricane-related sales in the quarter were about $200 million. Lowe's Chief Executive Robert Niblock said comp sales were also helped by the retailer's move to focus on professional contractors, a clientele with deeper pockets.

Lowe's has traditionally focused on do-it-yourself customers but is trying to take advantage of the prolonged housing recovery by offering more products and promotions geared toward those contractors.

Gift cards are shown for sale inside a Lowe's retail store in Carlsbad, California, U.S., May 24, 2017. REUTERS/Mike Blake

The retailer also said Chief Operating Officer Rick Damron would retire and would be replaced by the president of Lowe's international business, Richard Maltsbarger, effective Feb. 3.

Selling and general expenses fell about 7 percent to $3.81 billion.

Net sales rose 6.6 percent to $16.77 billion, beating analysts' average estimate of $16.59 billion.

Net income more than doubled to $872 million. The year-ago quarter included $462 million in non-cash pre-tax charges.

Lowe's shares, which have risen about 15 percent this year, were trading down about 1.5 percent at $80.28 in premarket trading.

(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Martina D'Couto)

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