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Q3 Earnings: Home Depot Vs. Lowe's

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Q3 Earnings: Home Depot Vs. Lowe's
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Home Depot Inc (NYSE: HD) reported its third-quarter results on Tuesday, which initially sent shares higher. However, throughout the trading session, shares of the do-it-yourself home improvement retailer slipped into negative territory and ended the day lower by 2.56 percent at $124.40.

Home Depot's closest peer Lowe's Companies, Inc. (NYSE: LOW) reported its results Wednesday morning. Brian Nagel of Oppenheimer cautioned investors that "Lowe's typically underperforms Home Depot. Once again, this was the case in Lowe's report.

Lowe's stock lost more than 5 percent early Wednesday morning.

Here is a brief comparison between the two results.

EPS, Revenue, Net Income

  • Home Depot: EPS of $1.60 ($0.02 beat), revenue of $23.15 billion ($0.1 billion beat), net earnings of $2.0 billion (up from $1.7 billion a year ago).
  • Lowe's: EPS of $0.88 ($0.08 miss), revenue of $15.74 billion ($0.12 billion miss), net earnings of $379 million (down from $736 million a year ago).

Comps

  • Home Depot: Q3 comps rose 5.5 percent (5.9 percent for U.S. stores).
  • Lowe's: Q3 comps rose 2.7 percent.

Outlook

  • Home Depot: Company raised 2016 EPS guidance to $6.33 from $6.31, guided for 6.3 percent rise in sales and 4.9 percent comp growth.
  • Lowe's: Company expects sales to rise 9 to 10 percent, comparable sales to rise 3 to 4 percent and earnings per share to be around $3.52.

Commentary

  • Home Depot: "We experienced balanced sales growth in the quarter driven by an increase in both ticket and transactions, and our continued focus on productivity drove double-digit earnings-per-share growth," said Craig Menear, chairman, CEO and president. "I would like to thank our associates and suppliers for their hard work and dedication to our customers throughout the quarter, and particularly in the face of Hurricane Matthew and the flooding in Louisiana."
  • Lowe's: "Our third quarter operating results were below our expectations due to slower sales in the first two months of the quarter," commented Robert A. Niblock, Lowe's chairman, president and CEO. "While we expected moderation in the second half of the year, traffic slowed more than we anticipated in August and September before improving in October, which put pressure on our profitability in the quarter."

At Last Check ...

In pre-market trading Wednesday, Lowe's was seen down 4.42 percent at $66. Home Depot was down 0.32 percent at $124.

Posted-In: Brian Nagel hardware home improvementEarnings News Guidance Movers Trading Ideas Best of Benzinga

 

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