How Lowe's Earnings Stack Up To Home Depot

Do-it-yourself home improvement retailer Lowe's Companies, Inc. LOW reported its first-quarter results Wednesday morning, sending the stock higher by more than 9 percent at the time of publication. The report compares favorably to rival Home Depot Inc HD, which was trading down slightly Wednesday morning.

The Top, Bottom Lines

Lowe's said it earned $1.19 per share in the first quarter on revenue of $17.4 billion. The Street was expecting the company to earn $1.25 per share on revenue of $17.63 billion.

Home Depot also reported a mixed first quarter print, as it earned $2.08 per share on revenue of $24.947 billion against expectations of $2.06 per share and $25.22 billion.

Comps

Lowe's said its sales for the first quarter rose 3 percent from a year ago, aided by a comparable sales increase of 0.6 percent for the entire company and a 0.5-percent increase from the U.S. business.

Home Depot sales in the quarter rose 4.4 percent from a year ago, while comparable sales were positive 4.2 percent for the entire company and positive 3.9 percent for the U.S. business.

Outlook

Lowe's guided its full year 2018 EPS to a range of $5.40 to $5.50 versus a Street estimate of $5.48. Comparable sales are expected to rise 3.5 percent and total sales around 5 percent.

Home Depot guided its 2018 sales to grow by around 6.7 percent and comps to be up around 5 percent. The company also expects EPS growth of 28 percent from 2017 levels to $9.31.

FBB On Lowe's

Lowe's quarterly print makes it clear there are both "risks and opportunities" in the stock, FBB Capital Partners' Mike Bailey said in a research report. A longer winter was responsible for "depressed demand" in outdoor products, but at the same time the company's status as the "second-best" do-it-yourself home improvement retailer remains unchanged, the analyst said.

A new CEO could help reverse a "string of disappointing sales and earnings," Bailey said. 

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