Home-improvement retailer Lowe’s (NYSE: LOW) is set to report its fiscal first-quarter results on May 21, with expectations that revenue and earnings will meet market expectations. The company’s performance in 2023 was impacted by factors such as a decrease in the willingness of do-it-yourself customers to spend on remodels and upgrades, as well as high interest rates affecting the housing market. For the full year 2024, Lowe’s expects total sales of $84 billion to $85 billion, comparable sales to be down 2% to 3%, and adjusted operating margin in the range of 12.6% to 13.7%, with diluted earnings per share expected to fall in the range of $12.00 to $12.30.
LOW stock has seen significant gains, rising 45% from early 2021 to around $230 now, outperforming the S&P 500 over the same period. However, the stock’s performance has not been consistent, with returns of 61% in 2021, -23% in 2022, and 12% in 2023. In comparison, the S&P 500 had returns of 27% in 2021, -19% in 2022, and 24% in 2023. Lowe’s has struggled to consistently outperform the market in recent years, as have other large companies in the Consumer Discretionary sector. The Trefis High Quality Portfolio, on the other hand, has consistently outperformed the S&P 500, providing better returns with less risk.
Trefis estimates Lowe’s Q1 2024 revenues to be around $21.2 billion, in line with consensus estimates. The company’s revenue fell 17% year-over-year in Q4 2023, with comparable sales decreasing indicating a slowdown in DIY demand and unfavorable winter weather. Lowe’s gross margin improved to 32.4% in Q4, and the operating margin increased to 9.7% from 7.6% in the previous year. The company’s fiscal 2023 sales totaled $86.3 billion, a 12.4% decrease from the previous year, and Trefis forecasts revenue to be around $85 billion in fiscal 2024.
The EPS for Lowe’s in Q1 2024 is expected to be $2.94 per Trefis analysis, matching consensus estimates. The company generated net earnings of $1.02 billion in Q4, or $1.77 per share, up from $957 million, or $1.58 per share, in the prior-year quarter. Additionally, Lowe’s stock price estimate aligns closely with the current market price, with a valuation of $240 per share based on an EPS estimate of $12.20 and a P/E multiple of 19.7x for fiscal 2024. Overall, Lowe’s performance in the first quarter of 2024 is expected to meet market expectations, with revenues and earnings in line with consensus estimates.
