Courtesy of Benzinga.
Shares of Lowe’s Companies, Inc. (NYSE: LOW) lost more than 6 percent Wednesday morning after the company’s earnings report fell short of expectations.
Lowe’s earned $1.57 per share in the second quarter on revenue of $19.5 billion, while Wall Street analysts were expecting the company to earn $1.61 per share on revenue of $19.53 billion. Net earnings for the quarter rose from $1.2 billion a year ago to $1.4 billion.
During the quarter Lowe’s bought back $1.25 billion worth of its stock and paid $299 million in dividends to shareholders.
One of the main takeaways from Lowe’s earnings report is that its performance is falling short of rival Home Depot Inc (NYSE: HD), Bloomberg noted. For instance, Home Depot reported superior same-store sales growth in its recent quarter compared to Lowe’s despite operating in a nearly identical market.
Specifically, Lowe’s same-store sales rose 4.5 percent in the quarter, which was ahead of the 4.3 percent analysts were expecting, Bloomberg said. But Home Depot reported a strong 6.3 percent gain in its quarter which topped the 5 percent gain some analysts had modeled.
Looking forward, Lowe’s thinks that a move to increase its business hours to the public will improve its competitive standing but this would come at the expense of margins.
“This is the right strategy to more fully capitalize on strong traffic trends in what we believe is a supportive macroeconomic backdrop for home improvement,” Lowe’s noted in its earnings report.
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