Lower (Lower) Q4 Revenue 2022

A Lowe’s Home Improvement warehouse worker collects carts in a parking lot on August 17, 2022 in Houston, Texas.

Brandon Bell | Getty Images News | Good pictures

Lowe’s reported fiscal fourth-quarter sales on Wednesday that fell short of Wall Street’s expectations, while also issuing a conservative outlook for the current year.

Here’s how the retailer did compared to Wall Street’s expectations, based on Refinitiv’s survey of analysts:

  • Earnings per share: $2.28 adjusted, vs. $2.21 expected
  • Revenue: $22.45 billion versus $22.69 billion expected

The company had net income of $957 million for the three months ended Feb. 3, compared with $1.21 billion, or $1.78 per share, a year earlier.

Sales rose to $22.45 billion from $21.34 billion a year earlier. However, Lowe’s fiscal fourth quarter included an extra week of sales of $1.4 billion. Without that extra week, sales would have been slightly lower than last year.

Same-store sales fell 1.5% and 0.7% in the US

In fiscal 2023, Lowe’s said it expects total sales to be between $88 billion and $90 billion, compared with Wall Street’s estimate of $90.48 billion. The company expects same-store sales to decline 2% from the previous fiscal year.

The company expects annual earnings per share to be in the range of $13.60 to $14.00, versus the $13.79 forecast by analysts.

At this time last year, Lowe’s was benefiting from a red-hot housing market that led many to fix up and renovate their homes. As the market gradually cooled in the second half of 2022, Wall Street’s expectations fell compared to previous quarters.

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Amid the Covid pandemic, the home improvement market grew as consumers stuck at home undertook costly renovations and improved their living spaces. The market is under a lot of pressure these days. Shoppers feeling pinched by high inflation are spending their discretionary dollars on travel and entertainment, as opposed to items like patio furniture and paint.

Last week, rival Home Depot missed Wall Street’s earnings expectations for the first time since November 2019 and issued a muted outlook. The company expects flat consumer spending and more pressure on the sector in the coming quarters as the pandemic-fueled recession eases.

However, a persistent shortfall in the country’s housing supply and an aging housing stock have long benefited the home improvement sector, which could benefit retailers. With interest rates rising in a stagnant housing market, many people with low interest rates may choose to stay in their homes and make renovations instead of moving somewhere new.

Read the full earnings release Here.

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