Lowe's: Fiscal Q3 Earnings Snapshot
Lowe’s Companies, Inc. (NYSE: LOW)
reported a 2.5% decrease in net sales for its fiscal third quarter 2023, reaching $23.2 billion compared to $23.8 billion in the same period last year. The decrease was primarily driven by a decline in comparable sales, which fell by 3.3%. Total comparable sales for the quarter decreased by 3.3%, with a 4.3% decrease in U.S. comparable sales partially offset by a 12.5% increase in comparable sales in Canada.
Despite the decline in sales, Lowe's reported a 15.4% increase in net income, reaching $1.44 billion compared to $1.25 billion in the prior year quarter. The increase in net income was primarily driven by improved gross margin, which increased by 134 basis points to 36.4%, and a decrease in SG&A expenses as a percentage of sales. As a result, diluted earnings per share (EPS) increased by 16.9% to $2.27 compared to $1.94 in the prior year quarter.
Quarterly Highlights
- Net sales decreased by 2.5% to $23.2 billion
- Comparable sales decreased by 3.3%
- Gross margin increased by 134 basis points to 36.4%
- SG&A expenses decreased as a percentage of sales
- Net income increased by 15.4% to $1.44 billion
- Diluted EPS increased by 16.9% to $2.27
Outlook
For the full fiscal year 2023, Lowe's expects comparable sales to be flat to down 2%. The company also expects net sales to be in the range of $97 billion to $99 billion, with diluted EPS in the range of $13.65 to $14.15. Lowe's remains committed to its long-term growth strategy, which includes investing in its omnichannel capabilities, expanding its product offerings, and improving its customer service.
Conclusion
Lowe's fiscal third quarter 2023 results were mixed, with a decrease in net sales but an increase in net income and diluted EPS. The company's focus on improving its gross margin and reducing SG&A expenses helped to offset the decline in sales. Looking ahead, Lowe's expects comparable sales to be flat to down 2% for the full fiscal year 2023, but the company remains committed to its long-term growth strategy.
