Lowe's Sales, Profit Top Estimates Despite Continued 'Big Ticket' Softness

Lowe's Cos Inc reported better-than-expected quarterly sales and profit on Wednesday, as demand for home improvement projects remained strong despite weakness in discretionary spending on items like appliances.

The home improvement chain's total sales rose 5.4% to $27.91 billion in the fiscal fourth quarter ended Feb. 3, beating analysts' average estimate of $27.33 billion, according to Refinitiv data. Net income rose 18.3% to $2.28 billion, or $4.65 per share, above expectations of $4.42 per share.

Lowe's said comparable sales rose 5.0% in the quarter, driven by strength in categories such as paint, flooring and tools. However, sales of "big-ticket" items like appliances and grills declined, reflecting broader weakness in discretionary spending as consumers grapple with rising inflation and interest rates.

Despite the softness in big-ticket items, Lowe's said it remains optimistic about the long-term outlook for the home improvement market. The company cited factors such as a large backlog of home improvement projects, favorable demographics and a strong housing market.

"We are encouraged by the continued strength in our business as we navigate the current macroeconomic environment," Lowe's CEO Marvin Ellison said in a statement. "Our results demonstrate the resilience of the home improvement market and the strength of our omnichannel offering."

Lowe's shares rose 1.9% to $234.20 in premarket trading.

The company's results come as the home improvement sector faces challenges from rising costs and supply chain disruptions. However, Lowe's has been able to navigate these headwinds by focusing on its core customers and investing in its omnichannel capabilities.

Lowe's is one of the largest home improvement retailers in the world, with over 2,200 stores in North America and an online presence. The company competes with Home Depot Inc and other retailers.