Lowe’s Companies delivered better-than-expected quarterly results across the board as sales, like those of rival Home Depot, benefited from strong demand for hurricane-related supplies.
For the third quarter, Lowe’s same-store sales, a key retail metric, rose 5.7%, easily beating analysts’ estimates of a 4.6% gain. The company earned $1.05 a share, excluding items, as revenue jumped 6.5% to $16.8 billion.
Analysts had expected earnings of $16.59 billion on earnings of $1.02 per share. Shopping for emergency supplies and repairs following the devastating hurricanes accounted for about $200 million in sales.
“Repairs resulting from the hurricanes have blown Lowe’s sales into much firmer growth territory,” GlobalData Retail Managing Director Neil Saunders wrote in a note to clients.
“It is not just natural disasters that are keeping Lowe’s numbers aloft. Solid levels of activity in the housing market and a willingness among consumers to invest in the home also continue to drive the DIY market,” he added. “This is benefiting Lowe’s, although not quite as much as it is Home Depot — which remains the destination of choice for many casual improvers and professionals.”
In trading Tuesday, Lowe’s shares fell just over 1% to $80.59. “Looking at Lowe’s in isolation, this was a good quarter, but once again it’s not as good as what Home Depot reported a week ago,” Oppenheimer analyst Brian Nagel told CNBC.
Home Depot reported third-quarter same-store sales growth of 7.9%.
“During the third quarter, we drove traffic in-store and online with compelling messaging and integrated customer experiences. We continue to invest in omni-channel capabilities to enhance value for customers and shareholders,” Lowe’s CEO Robert A. Niblock said in a news release.
As CNBC reports, the company has been “experimenting with technology and opened up ‘smart home centers’ at some locations ahead of the holidays” to lure young shoppers. It has also been running promotions aimed at professional contractors.
“I am also pleased with the progress we’ve made to enhance our product and service offering for the Pro customer ,” Niblock said.