suntimes
PICTURESQUE 
Weather Updates

Lowe’s 1Q results rise, but miss expectations

Home-improvement retailer Lowe’s fiscal first-quarter net income climbed 16 percent bolstered part by lower tax rate. | AP file photo

Home-improvement retailer Lowe’s fiscal first-quarter net income climbed 16 percent, bolstered in part by a lower tax rate. | AP file photo

storyidforme: 66685621
tmspicid: 23792320
fileheaderid: 11666002

Updated: May 21, 2014 8:25AM



MOORESVILLE, N.C. — Home-improvement retailer Lowe’s fiscal first-quarter net income climbed 16 percent, bolstered in part by a lower tax rate.

But its revenue and its profit adjusted to exclude the effect of one-time items missed analysts’ estimates as poor weather kept customers from stores during the beginning of the key spring selling season.

Nonetheless, the company raised its full-year earnings forecast on Wednesday.

Spring is the most important season for home improvement retailers as Americans start spending more on outdoor projects. But a wet and cold spring has put a damper on shoppers starting on yard and garden products. On Tuesday Lowe’s larger rival Home Depot Inc. also said bad weather hurt its first-quarter results.

“We executed well during the quarter, despite an unexpectedly prolonged winter in many areas of the country,” Lowe’s CEO Robert Niblock said.

Niblock said in a statement that unfavorable weather conditions lowered traffic and hurt the sales of products in its exterior categories — like patio and gardening goods. But he added that results for indoor categories — such as plumbing parts and indoor paints — were solid.

Niblock also said that results have gotten better in May.

Lowe’s shares rose 8 cents to $45.60 in premarket trading about an hour ahead of the market open. The stock is down about 8 percent since the beginning of the year.

For the three months ended May 2, Lowe’s Cos. earned $624 million, or 61 cents per share. A year ago the Mooresville, North Carolina, company earned $540 million, or 49 cents per share.

The lower tax rate added 4 cents per share to the latest quarter’s earnings, while asset impairment charges reduced earnings by 1 cent.

Excluding these items, earnings were 58 cents per share.

Analysts polled by FactSet forecast earnings of 60 cents per share.

Revenue rose 2 percent to $13.4 billion from $13.09 billion, but still fell short of Wall Street’s prediction of $13.89 billion.

Going forward, Lowe’s now sees fiscal 2014 earnings of about $2.63 per share. Its prior guidance was for earnings of about $2.60 per share. Revenue is still expected to rise by approximately 5 percent. Based on fiscal 2013’s revenue of $53.42 billion, that implies about $56.1 billion.

Analysts expect full-year earnings of $2.62 per share on revenue of $56.03 billion.



© 2014 Sun-Times Media, LLC. All rights reserved. This material may not be copied or distributed without permission. For more information about reprints and permissions, visit www.suntimesreprints.com. To order a reprint of this article, click here.