Lowe’s (LOW) seems to be slowly building momentum to kick-start 2025.
The home improvement retailer beat Wall Street’s estimates for the fourth quarter. On Wednesday before the market open, Lowe’s reported Q4 revenue of $18.6 billion, higher than the $18.3 billion the Street expected, and adjusted earnings per share of $1.93, above the Street’s estimates of $1.84.
Same-store sales increased 0.2%, turning positive for the first time in roughly two years. High-single-digit sales growth in its pro business and online segments, strong holiday performance, and “rebuilding efforts in the wake of recent hurricanes” boosted overall sales, the release said.
However, sales gains were “partially offset by continued near-term pressure in DIY discretionary spending,” the company said.
Lowe’s stock rose 2% in premarket trading following the results.
Lowe’s chairman and CEO Marvin Ellison said the team remains “confident in the long-term strength of the home improvement industry.” He added that “we are equally confident in our strategy to capitalize on the expected recovery.”
For the full 2025 fiscal year, the company expects total sales to be between $83.5 billion and $84.5 billion. Same-store sales are expected to be flat to up 1% compared to a year ago. Lowe’s outlook fell below Wall Street’s expectations, highlighting more cautious consumer spending in the year ahead.
On Tuesday, Lowe’s competitor Home Depot (HD), also facing shoppers pulling back on home projects, said it expects same-store sales growth to increase by 1%.
Here’s what Lowe’s reported for its fourth quarter earnings compared to Wall Street consensus estimates, compiled by Bloomberg:
-
Revenue: $18.6 billion versus, $18.3 billion
-
Adjusted earnings per share: $1.93, versus $1.84
-
Same-store sales growth: +0.2%, versus -1.91%
Here’s what Lowe’s posted for its full-year results. compared to Bloomberg consensus estimates:
-
Revenue: $83.67 billion, versus $83.42 billion
-
Adjusted earnings per share: $12.23, versus $11.94
Some analysts think Lowe’s could have a leg up over Home Depot in 2025 when do-it-yourself (DIY) customers return to the market.
“With more exposure to bigger ticket discretionary products and the DIY segment, Lowe’s has more torque in its business once the cycle turns,” Wedbush’s Basham said. “We expect to see that unfold as the year progresses.”
Lowe’s faces a shift to services instead of home improvements and signs that consumer spending remains pressured by high interest rates though. The company is also “lapping difficult comparisons from the past four years,” Joe Feldman of Telsey Advisory Group wrote.
