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Lowe's shares, which fell nearly 4% on Tuesday following the
profit margin warning from larger rival Home Depot, rose 2.6% in
premarket trading.
The surge in spending on do-it-yourself home projects seen
during the early stages of the pandemic has so far held up
better than feared even as restrictions ease, while builders and
handymen are upgrading their toolkits to complete a backlog of
delayed projects.
Lowe's same-store sales rose 5% in the fourth quarter ended Jan.
28, compared to analysts' estimates of a 3.1% increase,
according to IBES data from Refinitiv. In comparison, Home Depot
reported an 8.1% rise in same-store sales on Tuesday.
Lowe's also said it expects its annual gross profit margins to
be up slightly from last year, a more optimistic forecast than
its outlook in December when it forecast 2022 margins to be
roughly flat.
Margins are at top of investors' mind this earnings season as
runaway inflation and labor costs threaten to dent Corporate
America's profits.
Home Depot on Tuesday indicated that it expects gross profit
margins to remain under pressure through the year.
Lowe's said it expects fiscal year 2022 total sales of $97
billion to $99 billion, compared to a previous forecast of $94
billion to $97 billion.
The company forecast full-year earnings per share of $13.10 to
$13.60, above its previous outlook of $12.25 to $13.
(Reporting by Uday Sampath in Bengaluru; Editing by Sriraj
Kalluvila)
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