Lowe's Q3 Earnings Top Estimates, Raises FY21 Revenue Outlook; To Buyback $3B Stock In Q4

Lowe's Q3 Earnings Top Estimates, Raises FY21 Revenue Outlook; To Buyback $3B Stock In Q4
  • Lowe's Companies Inc LOW reported third-quarter FY21 sales growth of 2.7% year-on-year, to $22.92 billion, beating the analyst consensus of $21.99 billion.
  • Comparable sales increased 2.2%, while comparable sales for the U.S. home improvement business rose 2.6%. U.S. comparable sales increase on a two-year basis of 33.7%.
  • EPS of $2.73 beat the analyst consensus of $2.35.
  • Gross profit rose 3.9% Y/Y to $7.6 billion, with a profit margin expanding 40 basis points to 33.10%.
  • The operating margin expanded 242 basis points to 12.17%, and operating income for the quarter rose 28.2% to $2.8 billion.
  • The company held $6.67 billion in cash and equivalents as of October 29, 2021. Net cash provided by operating activities for the nine months totaled $9.2 billion.
  • Recently, Lowe's board declared a quarterly cash dividend of $0.80 per share, payable February 2, 2022, to shareholders of record as of January 19, 2022.
  • The company now plans to repurchase approximately $3 billion in shares in Q4.
  • Outlook: Lowe's raised FY21 sales guidance to ~$95 billion (prior outlook $92 billion).
  • It expects the gross margin rate up slightly and operating margin of 12.4% (prior view 12.2%).
  • Total share repurchases of ~$12 billion (prior view minimum of $9 billion).
  • Price Action: LOW shares are trading higher by 2.13% at $250.00 in premarket on the last check Wednesday.
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