Lowe’s Companies (LOW) is gearing up to release its second-quarter earnings report on Tuesday, an event that will likely draw significant attention from investors and analysts alike. The report is expected to provide crucial insights into consumer spending patterns related to home repairs and its potential influence on the overall housing sector.
Analysts are anticipating that Lowe’s will report revenue of $23.91 billion for the second quarter, according to data from Benzinga Pro. This figure represents a slight decline from the $24.96 billion reported in the same period last year. While Lowe’s has exceeded revenue estimates in three out of the past five quarters, including the last two, the current quarter’s forecast suggests a potential dip.
Earnings per share are expected to come in at $3.97, a notable decrease from the $4.56 reported in last year’s second quarter. Notably, Lowe’s has consistently surpassed analyst estimates for earnings per share over the past ten quarters.
JPMorgan analyst Christopher Horvers has cautioned that Lowe’s might lower its guidance in the wake of its second-quarter results. He attributes this potential move to a combination of weather-related challenges and a slower-than-expected pace in do-it-yourself home improvement projects. Horvers maintains an Overweight rating for Lowe’s and has increased the price target from $268 to $270, reflecting a more optimistic outlook for the latter half of the year.
Beyond the financial figures, investors will be scrutinizing Lowe’s performance against its peer, Home Depot (HD). Home Depot recently reported a 0.6% year-over-year increase in quarterly sales, falling short of analysts’ expectations. This was accompanied by a decline in customer transactions and comparable sales, underscoring the pressures facing the home improvement sector.
Lowe’s second-quarter report will reveal whether the company has experienced similar sales dips, weaker same-store sales, and a reduced average ticket size. Data from Placer.ai indicates that Lowe’s store visits increased by 0.6% year-over-year in the second quarter, slightly trailing Home Depot’s 1.1% increase.
Home Depot CEO Ted Decker has attributed the recent softening of demand to higher interest rates and macroeconomic uncertainty. Investors and analysts will closely monitor Lowe’s comments to determine if the company echoes these sentiments and whether it perceives similar pressures on the housing market.
Lowe’s CEO Marvin Ellison had previously announced the national rollout of a new DIY loyalty program, expanded same-day delivery options, and strategic market share gains in key categories during the first quarter. An update on these initiatives could offer valuable insights into the home improvement retailer’s trajectory for the second half of the year.
As of current trading, Lowe’s stock stands at $242.76, within a 52-week range of $181.85 to $262.49. The stock has displayed a positive performance, gaining 9.1% year-to-date in 2024 and 9.3% over the past year. In contrast, Home Depot shares have risen by 4.9% year-to-date and 12.1% over the last year.
