MW Lowe's sees surprise sales growth amid DIY strength and post-hurricane rebuilds

By Tomi Kilgore

CEO Ellison said he's 'prepared for anything' regarding tariffs and sees homeowners tapping into record equity to fund larger projects

Shares of Lowe's Cos. were getting a nice lift on Wednesday after the home-improvement retailer reported surprise growth in quarterly comparable sales and earnings that beat forecasts.

The upbeat results offset a full-year outlook that was below forecasts, as the company said it's still seeing customers who are "cautious" about spending on discretionary do-it-yourself projects, particularly higher-priced ones.

And when asked on the post-earnings call with analysts if the outlook includes any impact from tariffs imposed by the Trump administration, the company said tariffs were "not explicitly included or incorporated" in the guidance, repeating what many others have said.

"But what I can tell you is, we are prepared for everything and we're prepared for anything," Chief Executive Marvin Ellison said, according to an AlphaSense transcript.

Lowe's $(LOW)$ results come a day after rival Home Depot Inc. $(HD)$ posted a similar report, including a surprise increase in comparable sales and downbeat full-year guidance.

Lowe's stock climbed 3.4% in morning trading, after rising 2.2% the day before to bounce off a six-month low.

For the fiscal fourth quarter ending Jan. 31, comparable sales, or sales of stores open at least a year, rose 0.2% from a year ago, to beat the FactSet consensus for a decline of 1.8%. That was the first increase in comparable sales since the quarter that ended in October 2022.

Ellison said he was "pleased" with the return to growth, which was driven by continued strong demand from the chain's professional customer base and from online sales, strong seasonal performance for DIY projects and rebuilding work following last year's hurricanes.

Regarding rebuilding efforts following the recent wildfires in Southern California, Ellison noted that Lowe's does not have a significant store presence in that region.

The company also reported quarterly net income that rose to $1.13 billion, or $1.99 a share, from $1.02 billion, or $1.77 a share, in the same period a year ago. Excluding nonrecurring items, adjusted earnings per share of $1.93 beat the FactSet consensus of $1.84.

Net sales slipped 0.3% to $18.55 billion, to beat expectations of $18.3 billion.

For 2025, same-store sales are expected to be flat to up 1%, while analysts surveyed by FactSet were expecting, on average, a rise of 1.1%.

Lowe's is also projecting earnings per share of $12.15 to $12.40, compared with the FactSet consensus for $12.46, and sales are guided to $83.5 billion to $84.5 billion, just below current expectations of $84.56 billion.

Despite the downbeat outlook, Ellison painted a positive picture for the medium- to long-term outlook for the home-improvement business, given the rise in home prices, faster-than-inflation growth in personal incomes and the oldest existing housing stock in U.S. history.

"These drivers will sustain long-term demand as homeowners invest in repairs and upgrades," Ellison said. "And we anticipate that some homeowners will begin to tap into record levels of equity in their homes to fund larger renovation projects."

Lowe's stock has dropped 8.7% over the past three months, while Home Depot shares have shed 7.8% and the S&P 500 index SPX has eased 0.3%.

-Tomi Kilgore

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February 26, 2025 11:22 ET (16:22 GMT)

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