What happened

Shares of Lowe's Companies (LOW -1.08%) fell 5% on Wednesday after the home-improvement retailer reported mixed fourth-quarter results and provided disappointing guidance. The company is undergoing a renovation under CEO Marvin Ellison, which, as any homeowner knows, usually takes a significant amount of time to play out.

So what

Lowe's reported adjusted fourth-quarter earnings of $0.94 per share, ahead of the $0.91 per-share estimate, but revenue at $16.03 billion came in about $100 million light. Comparable sales for the quarter were up 2.5% year over year, short of the 3.5% expectation, and gross margin fell 20 basis points to 31.1%.

A house construction site.

Image source: Getty Images.

The company's beat was driven by strong expense management and productivity improvements from its U.S. brick-and-mortar stores. CEO Ellison said in a statement that "we have a detailed road map in place to modernize our e-commerce platform" -- which he hopes will help accelerate future growth.

"Though we are only one year into a multiyear plan, we made significant progress transforming our company and believe we are well-positioned to capitalize on solid demand in a healthy home improvement market," Ellison said. "We are entering 2020 from a position of strength and remain confident that our focus on retail fundamentals combined with technology improvements will continue to pay dividends across the business."

Now what

Lowe's expects full-year 2020 adjusted earnings of between $6.45 to $6.58 per share, short of the $6.67 per share analyst estimate, on full-year revenue growth of 2.5% to 3%. That's not bad, but not quite to the level that rival Home Depot forecasted when it delivered earnings.

Lowe's is much better positioned than most retail stocks, but the company, despite its progress, still isn't giving investors much reason to rush in to buy.