Lowe's Companies Q1 Results Top Estimations, Offers Upbeat Full Year Earnings Outlook

Lowe's Companies, Inc. LOW announced a 31.4 percent jump in net earnings for the first quarter, driven by 7.8 percent increase in the top line helped by 7.3 percent growth in comparable store sales. As a result, the results exceeded the street expectations. The company's earnings outlook came in above the analysts' predictions.

Lowe's Companies reported net earnings of $884 million. Similarly, earnings per share jumped 40.0 percent to $0.98 from $0.70 in the first quarter of the last year. The results included an unrealized gain $160 million and earnings per share by $0.11 due to hedging on a foreign currency in respect of the pending RONA acquisition. Street analysts estimated $0.85 a share.

The company's sales increased 7.8 percent to $15.2 billion from $14.1 billion in the first quarter of 2015 driven by comparable sales growth of 7.3 percent. The company added that comparable sales for the U.S. home improvement business advanced 7.5 percent. This was also higher than $14.87 billion predicted by the analysts.

Lowe's chairman, president and CEO, Robert Niblock, reacted to the results and said, "We executed well in the quarter, growing both transaction and average ticket to achieve comparable sales growth that exceeded our expectations. We continued to focus on providing better omni-channel customer experiences, and saw strength in indoor as well as outdoor categories.

Niblock continued to say that "Our team's project expertise and commitment to customer service allowed us to capitalize on strong home improvement demand during the quarter, and I would like to thank them for their efforts."

The company indicated it bought back $1.2 billion worth of shares under its share buyback program and paid $255 million as dividend to its shareholders.

Going forward, Lowe's expects earnings to be $4.11 a share on revenue growth of about 6 percent for the full year. Street expects the company to deliver earnings of $4.00 a share and revenue growth of 6.3 percent.

On Tuesday, the stock shed 1.23 percent.