Lowe’s weathered market headwinds well in the second quarter, beating earnings estimates and seeing gains in lawn and garden and a spike in consumer spending due to economic stimulus checks.
Net earnings declined 7.9 percent to $938 million, down from $1.02 billion in the same period last year. Net sales rose 2.4 percent to $14.5 billion from $14.2 billion in last year’s second quarter.
Comparable-store sales declined 5.3 percent, a better-than-anticipated result for stores opened more than one year.
"Our sales results for the quarter, while better than our forecast, reflect the realities of the continuing macroeconomic pressures on our industry," said Robert Niblock, Lowe's chairman and CEO, in a statement.
Niblock said the retailer saw “relative strength” in seasonal sales, particularly lawn and garden, in large part because of comparisons to a drought period in last year’s second quarter. He added that the company saw a boost in sales presumed to be from economic stimulus tax rebate checks that were issued to a large number of consumers in the second quarter.
Still, “weakness in bigger ticket projects continues, particularly in markets most impacted by the housing downturn," Niblock said.
In the second quarter, Lowe's opened 23 new stores. Currently, the retailer operates 1,577 stores in the United States and Canada. In the third quarter, the company said it expects to open 38 new stores. Lowe’s projects a sales increase of 1 percent to 2 percent in the third quarter, alongside a comparable-store sales decline of 5 percent to 7 percent.