Lowe’s (NYSE:LOW) suffered a 44% slump in third-quarter profits, but the home-improvement retailer’s adjusted-earnings and revenue beat expectations.
The Mooresville, N.C.-based company said it earned $225 million, or 18 cents a share, last quarter, compared with a profit of $404 million, or 29 cents a share, a year earlier. Excluding one-time items, it earned 35 cents a share, exceeding estimates by 2 cents.
Revenue increased 2.3% to $11.85 billion, topping the Street’s view of $11.69 billion. Same-store sales inched up 0.7%. Gross margins shrank to 34.1% from 35%.
"Our performance is not at the level we expect relative to the market," CEO Robert Niblock said in a statement. "We are making the changes necessary to right size the organization, improve speed to market and enhance the shopping experience.”
Lowe’s, which is a main rival to home-improvement leader Home Depot (NYSE:HD), also updated its full-year guidance.
The retailer lowered its full-year GAAP EPS view to $1.37 to $1.40, including a 20-cent charge for store closings. Analysts had been calling for non-GAAP EPS of $1.59.
However, Lowe’s upped its revenue growth forecast to a rise of 2% to 3%, up from 2% previously. Same-store sales are expected to fall 1% for the year. Lowe’s also forecasted fourth-quarter same-store sales being flat or rising 1%.
“I am confident we are moving forward on a clear path that is not dependent on an unlikely near-term economic recovery,” Niblock said.
Shares of Lowe’s rose 1.47% to $23.45 ahead of Monday’s open. They have declined almost 8% so far this year.