Lowe’s Earnings Report Anticipation: A Deeper Dive
A Reflection of the Market’s Reactions
Following the positive results from its industry counterpart, Home Depot, all eyes are now on Lowe’s. The home improvement retailer is gearing up to announce its results on August 22nd. Home Depot recently reported an uptick in smaller-sized projects, yet encountered hurdles with larger, discretionary categories, which could hint at a broader trend of home projects slowing down post-pandemic. Moreover, Home Depot confidently shared its projections for FY23.
Forecasts for Lowe’s
As market watchers eagerly anticipate the release, current forecasts suggest a potential dip in earnings. The prevailing consensus pegs Lowe’s earnings per share (EPS) at $4.49, hinting at a potential 3.5% drop when compared to the previous year. Furthermore, the revenue estimate sits at approximately $25.0 billion, marking a 9% decrease from the $27.5 billion achieved during the same quarter of the preceding year.
Performance Insights
Lowe’s has showcased a promising performance this year, consistently outpacing Home Depot. While many Wall Street analysts have given Lowe’s their endorsement, the company’s track record is especially noteworthy. Lowe’s has surpassed EPS estimates for an impressive eight consecutive quarters, and in five of those reports, they exceeded revenue expectations as well.
What the Market Expects
Lowe’s shares have been on an upward trajectory, registering a 9% growth since the beginning of the year. With the Q2 2023 results announcement on the horizon, analysts predict revenues for the quarter to land around $24.9 billion, suggesting a 9% dip year-over-year if these forecasts hold.
Points to Consider
Several factors could influence Lowe’s performance this quarter. The company might continue to feel the ripple effects of the reduced pace in home improvement spending. Moreover, lumber deflation might cast a shadow on the results.
In the preceding quarter, Lowe’s projected a $400 million reduction in Q2 sales due to a shift in its fiscal calendar. The lumber deflation is expected to cast a negative impression on sales by roughly 150 basis points for this quarter. However, a silver lining may come in the form of a $250 million sales boost from the delayed spring.
Looking Ahead
The trends suggest a shift in consumer behavior towards smaller projects, with larger, discretionary purchases taking a backseat. Given Lowe’s history of consistently exceeding market expectations and the industry insights provided by Home Depot’s recent report, it’s a waiting game to see if Lowe’s will carry forward this momentum in its imminent earnings report.
