Lowe’s cuts back profit estimate; Q2 results up from last year but below estimates

MOORESVILLE, N.C. – Lowe’s stock is under pressure after its second-quarter profit fell short of most expectations — even after taking into account costs associated with acquiring Canada’s largest chain of home improvement stores last spring.

For the three months ended July 29, Lowe’s Cos. earned $1.17 billion, or $1.31 per share.

Adjusting those per share earnings to account for six cents in foreign-exchange items related to the acquisition of Rona Inc., Lowe’s profit was up from last year but five cents short of analyst expectations of $1.42 per share.

Revenue was up from last year but also short of estimates. It climbed to $18.26 billion, about $185 million below a consensus estimate compiled by Thomson Reuters.

A year earlier the company, headquartered in Mooresville, N.C., earned $1.13 billion, or $1.20 per share, with $17.35 billion of revenue for the comparable quarter.

Sales at stores open at least a year, a key gauge of a retailer’s health, rose two per cent, less than half the 4.2 per cent industry analysts had projected, according to FactSet.

Lowe’s said Thursday it has reduced its full-year profit estimate to $4.06 per share, for the 12 months ending Feb. 3, 2017. It’s previous guidance, issued in May, was for $4.11 per share in annual earnings including the impact of Rona.

On Tuesday, rival Home Depot Inc. posted record second-quarter sales and earnings and raised its profit expectations for the year.

Lowe’s had 2,108 home improvement and hardware stores in the United States, Canada and Mexico at quarter’s end.

Its purchase of Rona, makes Lowe’s the biggest home-improvement retailer in Canada. It had previously been No. 3 after Rona and Home Depot in terms of total number of Canadian stores.

— With files from The Canadian Press.