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MOORESVILLE, N.C. – Lowe's, based in Mooresville, has surpassed the second-quarter earnings forecast, fueled by strong demand for spring products and sales to contractors.
While the home improvement retailer has had to cope with lower lumber prices and a harsh spring season, CEO Marvin Ellison said Lowe has seen similar store sales growth in the US .
[ALSO READ: Mooresville-based Lowe’s expanding sponsorship with Panthers]
"Our transformation is underway and our future is bright.We are confident that we are on track to take advantage of strong demand in a healthy home renovation market and generate profitable growth in the long term", did he declare.
Ellison, a former Home Depot executive who held the position of director at Lowe last year, is trying to reshape the home improvement retailer's culture, far behind Home Depot in the sector.
Wall Street likes what it does.
Shares jumped 12.6% before the opening bell on Wednesday.
Ellison has downsized the hierarchy within the company and outsourced some tasks formerly performed by employees, such as maintenance. This resulted in thousands of layoffs.
[ALSO READ: Mooresville-based Lowe’s cuts store jobs, seeks to outsource workers]
The best-selling products are also disappearing from the stores.
For the quarter ended August 2, the Mooresville company posted a profit of $ 1.68 billion, or $ 2.14 per share. A year earlier, he earned $ 1.52 billion, or $ 1.86 per share.
Excluding one-time costs, earnings were $ 2.15 per share. This easily exceeded the $ 2 per share analyzed by analysts at Zacks Investment Research.
Revenues totaled $ 20.99 billion, slightly above Wall Street's expectations.
Sales at stores that have been open for at least a year have increased by 2.3% and those in stores in the United States by 3.2%. Industry analysts are watching this figure carefully as it removes volatility from recently opened or closed stores, making it a good barometer of a retailer's health.
On Tuesday, its competitor Home Depot Inc. also surpassed the second-quarter earnings forecast, but the company reduced its sales forecast for the year due to lower lumber prices and potential impact. rates on its customers.
Lowe's has maintained its adjusted earnings outlook for the full year from $ 5.45 to $ 5.65 per share.
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