Lowe’s (LOW) said Monday its profits grew by 9.6% during the second quarter, but the home improvement retailer’s results and forecast slightly missed Wall Street’s expectations.
The company said it earned $832 million, or 58 cents a share, last quarter, compared with a profit of $759 million, or 51 cents a share, in the year-earlier period. Analysts had projected EPS of 59 cents.
Revenue increased by 3.7% last quarter to $14.36 billion, missing forecasts from analysts for $14.52 billion. Same-store sales rose 1.6%. Gross margin rose slightly from 34.84% to 34.86%.
Lowe’s also issued somewhat cautious guidance, saying it sees third-quarter EPS of 28 cents to 32 cents. The midpoint of that range would come in shy of the Street’s view of 31 cents a share. Same-store sales are expected to increase 1% to 3% and overall sales to rise 3% to 5%.
For the full year, Lowe’s forecasted EPS of $1.38 to $1.45, compared with estimates from analysts for $1.42. The retailer said it sees same-store sales rising 2% for the year and total sales jumping 4%.
“Despite economic uncertainty, our continued focus on the customer and prudent expense management yielded solid results for the quarter,” CEO Robert Niblock said in a statement. “With limited visibility into near-term demand, we continue to focus on operational efficiency to create value for our shareholders. Longer-term, we believe improvements in labor and housing markets will be necessary to support more consistent improvement in demand for home improvement products.”
Lowe’s said that after opening four stores and closing one last quarter, it expects to open up 12 in the third quarter.
Despite the slightly worse-than-expected results and cautious view, Lowe’s stock rose 3.32% to $20.24. The company’s stock was down 16.2% on the year as of Friday’s close so it’s possible shareholders had been bracing for weaker results.