Lowe’s (LOW) reported a drop in earnings and revenue for the fourth quarter, but beat Wall Street’s view amid a recovering housing market and repairs following Hurricane Sandy.
The home improvement retailer also released its fiscal-year outlook that came in weaker than expected, although expectations for sales growth were strong.
Profit for the period, which ended Feb. 1 and lacked an extra week compared to the same quarter a year earlier, checked in at $288 million versus $322 million year-over-year. Per-share earnings were 26 cents, as the number of shares outstanding fell 10%. Revenue was down 5% to $11.05 billion.
Analysts were looking for per-share earnings of 23 cents on revenue of $10.84 billion.
Gross margin edged up slight to 34.3% from 34.2%. Same-store sales were up 1.9%, well above the 0.7% rise analysts expected .
The retailer said it expects comparable store sales to grow 3.5% in the current fiscal year. That would reflect the best year for Lowe’s, the second-biggest home-improvement retailer by sales behind Home Depot (HD), since 2006. The company projected per-share earnings of $2.05, below analysts’ view of $2.09. Expectations for total sales growth was 4%, above consensus estimates.
Lowe’s indicated that share buybacks will slow. Its board authorized $5 billion in share buybacks to be used over the next two years, a slower rate than the $4.35 billion in the previous fiscal year and the $4.3 billion annual average Lowe’s announced in December as part of its long-term goals.
Shares of Lowe’s were up 20 cents to $37.87 a share in pre-market trading Monday. The stock is up over 6% so far this year and more than 38% in the last 12 months.