Lowe’s reported a strong profit last year even though its stores had 6% lower sales on average in the fourth quarter compared with a year earlier.
Consumers are pulling back on home-improvement spending after record growth following the COVID-19 pandemic.
The Mooresville-based company’s $18.6 billion in revenue during the fourth quarter was down 17% from $22.4 billion a year earlier. But earnings increased to $1 billion, or $1.77 per share, compared with $957 million a year earlier. Analysts had expected $1.68 per share. The company said it cut expenses and improved its gross margin.
For the full year, Lowe’s had $86.4 billion in revenue, compared with $97 billion a year earlier. Net profit was $7.7 billion, versus $6.4 billion in 2022.
Shares of the second-largest home improvement retailer have risen about 15% over the past year. Lowe’s shares have more than doubled over the past five years, closing Tuesday at $235.39.
For the coming year, Lowe’s expects sales to remain flat at about $85 billion. Earnings per share are expected to be as much as $12.30 per share, while analysts have estimated $12.68. It also projects sales of stores that are more than a year old will decline by 2% to 3%, on average.
The company operates more than 1,700 stores and employs about 300,000 people. It is the second-largest public company based in North Carolina with a market value of about $130 billion.
About 75% of Lowe’s revenue comes from do-it-yourself customers, compared with about 50% at rival Home Depot. That balance of sales is from construction professionals, with whom Lowe’s continues to make efforts to expand its business.