NEW YORK (AP) — Lowe's Cos. delivered weaker-than-expected sales for its fiscal fourth quarter and offered an annual forecast that came below Wall Street expectations.
The report, issued Wednesday, sent shares down in midday trading while the broader markets rose.
The announcement comes a day after strong results from rival Home Depot, which reported better-than-expected quarterly profits and sales. It also reported robust comparable-store sales.
The contrasting quarterly performances highlights the increasing competition between Home Depot and Lowe’s, which is in the process of an overhaul under its CEO Marvin Ellison.
Ellison, a one-time Home Depot executive who took the top job at Lowe’s in mid 2018, is trying to reshape the culture at Lowe’s, which had been a distant second to Home Depot in the sector for a while. Ellison has been focusing on getting Lowe’s back to the fundamentals of retailing, like making sure the right items are in stock and improving customer service.
“Though we are only one year into a multiyear plan, we made significant progress transforming our company and believe we are well positioned to capitalize on solid demand in a healthy home improvement market,” said Ellison in a statement. “We are entering 2020 from a position of strength and remain confident that our focus on retail fundamentals combined with technology improvements will continue to pay dividends across the business.''
Lowe's reported fiscal fourth-quarter net income of $509 million, after reporting a loss in the same period a year earlier.
The Mooresville, North Carolina-based company said it had profit of 66 cents per share. Earnings, adjusted for non-recurring costs, came to 94 cents per share.
The results beat the average Wall Street estimate of 91 cents per share, based on an analyst survey by Zacks Investment Research.
The home improvement retailer posted revenue of $16.03 billion in the period, missing Street forecasts. Ten analysts surveyed by Zacks expected $16.15 billion.
Overall, sales at stores opened at least a year rose 2.5% for the quarter. The figure for the U.S. home improvement business increased 2.6%. Analysts were expecting 3.2% for the quarter, according to FactSet.
In comparison, sales at Home Depot stores open at least a year rose 5.2%, which was also better than analysts had expected. Those sales climbed 5.3% in the U.S.
Lowe's expects full-year earnings in the range of $6.45 to $6.65 per share. That's below the Street $6.67 per share estimate, according to FactSet.
Shares of Lowe's fell more than 2%, or $2.66, to $115.86 in late morning trading.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on LOW at https://www.zacks.com/ap/LOW