The 10-second takeaway
For the quarter ended Feb. 3 (Q4), Lowe's beat expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue improved and GAAP earnings per share improved significantly.
Gross margins dropped, operating margins dropped, and net margins grew.
Lowe's logged revenue of $11.63 billion. The 20 analysts polled by S&P Capital IQ expected revenue of $11.35 billion on the same basis. GAAP reported sales were 11% higher than the prior-year quarter's $10.48 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.29. The 24 earnings estimates compiled by S&P Capital IQ predicted $0.23 per share on the same basis. GAAP EPS of $0.26 for Q4 were 30% higher than the prior-year quarter's $0.20 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 34.2%, 140 basis points worse than the prior-year quarter. Operating margin was 5.0%, 40 basis points worse than the prior-year quarter. Net margin was 2.8%, 10 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $12.56 billion. On the bottom line, the average EPS estimate is $0.38.
Next year's average estimate for revenue is $50.39 billion. The average EPS estimate is $1.79.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 2,150 members out of 2,440 rating the stock outperform, and 290 members rating it underperform. Among 650 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 578 give Lowe's a green thumbs-up, and 72 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Lowe's is outperform, with an average price target of $27.04.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Lowe's. Motley Fool newsletter services have recommended writing covered calls in Lowe's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.