Lowe’s Q3 sales rise
After two consecutive quarters of negative comp-store sales, Mooresville, N.C.-based Lowe’s reported a 2.2 percent gain in comps —positive 3.0 percent in U.S. comps—and raised its guidance for full-year profit.
The world's second-largest home improvement retailer reported third quarter 2022 total sales of $23.5 billion, up 2.6 percent from the prior year’s quarter of $22.9 billion.
The retailer reported net earnings of $154 million for the third quarter, which included a pre-tax non-cash asset impairment charge of $2.1 billion related to the sale of its Canadian retail business. In the third quarter of 2021, the company posted net income of $1.896 billion.
Other highlights from the Lowe’s earnings call include the following stats and trends:
• Pro sales grew 16 percent in the quarter, marking the 10th consecutive quarter of double-digit gains for pro sales.
• Lowe’s annual Pro pulse survey had some encouraging results. More than 70 percent or respondents said they expect more work in 2023 than they had in 2022. “This is just another proof point of the resilience of home improvement demand, even in this uncertain macro environment,” said CEO Marvin Ellison.
• Lowe’s reported a balanced growth, with eight out of 15 merchandising departments above the company average. Comps were down slightly in hardlines, the result of comparisons to heavy spending prior to Hurricane Ida in 2021 that did not materialize prior to Hurricane Ian in 2022.
• Lumber surged to double-digit comps in the quarter. “As lumber prices have come down, DIY consumers are reengaging in home improvement projects they had previously put on hold,” said Bill Boltz, executive VP of merchandising.
• The upwardly revised forecast for 2022 calls for full-year sales of $97 billion to $98 billion, representing comps of flat to a decline of 1% as compared to the prior year. “This reflects our expectations of continued strong pro performance and steady DIY trends,” said CFO Brandon Sink.
Lowe’s third-quarter earnings were released the day after Home Depot posted domestic comp-store sales of growth of 4.5 percent.Lowe’s executives echoed remarks made by Home Depot executives regarding continued demand for products across the store, even in the face of inflation worries and housing slowdowns.
“Some of you have asked if we're seeing a shift away from discretionary purchases which is what we typically expect to see in a softer macro environment,” said Boltz. “And the straightforward answer is, no.”
As an example, Boltz pointed to a 12-foot, lighted, animated Halloween mummy with a price tag of more than $300. The product sold out early. “One could argue that this is one of the most discretionary items we sell,” he said. “And with Halloween in total being a highly discretionary category, this continues to give us a positive indication of the strength of our consumer.”
As of Oct. 28, 2022, Lowe’s said it operated 1,969 home improvement and hardware stores in. the U.S. and Canada representing 208 million square feet of retail selling space, and it serviced approximately 212 dealer-owned stores.
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The Bottom Line: Lowe’s sales moved ahead 3% for Q3 2022 to almost $24 billion.
What the CEO said: “We delivered better-than-expected results this quarter, with U.S. comps up 3%, driven by Pro growth of 19% and improved DIY sales trends. Sales on Lowes.com grew 12%, on top of 25% growth last year. We also drove substantial improvement in adjusted operating margin through disciplined execution and cost management,” said Marvin Ellison, chair, president and CEO of Lowe’s.
Company info: Click HERE to read the Q3 2022 financial report from Lowe’s.
