Lowe’s Companies, Inc. Beats Expectations with $1.1B Net Earnings in Q4

Lowe’s Companies, Inc. (NYSE: LOW) reported a solid performance for the fourth quarter of 2024, showcasing a slight increase in comparable sales and robust earnings.

The company announced net earnings of $1.1 billion, with diluted earnings per share (EPS) reaching $1.99 for the quarter ending January 31, 2025. This represents a notable improvement from the diluted EPS of $1.77 recorded in the same period of the previous year. A significant factor contributing to this quarter’s results was an $80 million pre-tax gain related to the 2022 sale of Lowe’s Canadian retail business, which enhanced the diluted EPS by $0.06. Excluding this gain, the adjusted diluted EPS stood at $1.93.

Total sales for the quarter amounted to $18.6 billion, with comparable sales rising by 0.2%. This growth was driven by strong performances in high-single-digit Pro and online sales, as well as successful holiday sales and rebuilding efforts following recent hurricanes.

However, these gains were somewhat offset by ongoing challenges in DIY discretionary spending. Marvin R. Ellison, Lowe’s chairman, president, and CEO, expressed satisfaction with the results, attributing the company’s success to the continued traction of its Total Home strategic initiatives. Ellison also highlighted the $80 million in discretionary bonuses awarded to frontline associates as a testament to their dedication and hard work. In terms of operational footprint, Lowe’s operated 1,748 stores, covering 195 million square feet of retail selling space as of the end of January 2025.

The company maintained its focus on capital allocation, repurchasing approximately 5.5 million shares for $1.4 billion and paying $650 million in dividends during the quarter. For the fiscal year, Lowe’s returned $6.5 billion to shareholders through share repurchases and dividends.

Lowe’s Reports Better than Expected Results for Q4 2024

Lowe’s fourth-quarter performance exceeded market expectations, delivering an EPS of $1.99 compared to the anticipated $1.81. When adjusted for the one-time gain from the Canadian business sale, the adjusted EPS of $1.93 still surpassed expectations. The company’s total sales of $18.6 billion also exceeded the projected $18.19 billion, reflecting its ability to navigate a challenging retail environment.

The better-than-expected results can be attributed to several factors. Strong performance in Pro and online sales segments, coupled with effective holiday promotions, played a significant role. Additionally, Lowe’s strategic initiatives aimed at bolstering its Total Home strategy have started to yield positive outcomes, enabling the company to outperform its peers and expectations.

Despite these successes, Lowe’s faced headwinds in the form of continued pressure on DIY discretionary spending. The company acknowledged the near-term challenges but remained confident in its long-term strategy and the resilience of the home improvement industry. By focusing on strategic initiatives and rewarding its workforce, Lowe’s has positioned itself to capitalize on future opportunities.

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Lowe’s Expects Total Sales Between $83.5B and $84.5B for Fiscal 2025

Looking ahead, Lowe’s has provided its fiscal 2025 outlook, anticipating total sales to range between $83.5 billion and $84.5 billion. The company expects comparable sales to remain flat or increase by up to 1% compared to the prior year. Operating income as a percentage of sales is projected to be between 12.3% and 12.4%, with net interest expenses estimated at approximately $1.3 billion.

In terms of earnings, Lowe’s forecasts diluted EPS to be in the range of $12.15 to $12.40 for the full year. The company plans to invest approximately $2.5 billion in capital expenditures, reflecting its commitment to enhancing its operational capabilities and strategic growth initiatives. Lowe’s also anticipates an effective income tax rate of around 24.5%.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.