On May 21, 2024, Lowe's Companies Inc (LOW, Financial) released its 8-K filing for the first quarter of 2024, reporting net earnings of $1.8 billion and diluted earnings per share (EPS) of $3.06. This compares to a diluted EPS of $3.77 in the first quarter of 2023, which included a gain from the 2022 sale of its Canadian retail business. Excluding this gain, the adjusted diluted EPS for Q1 2023 was $3.67.
Company Overview
Lowe's is the second-largest home improvement retailer in the world, operating more than 1,700 stores in the United States after the 2023 divestiture of its Canadian locations (RONA, Lowe's Canada, RĂ©no-DĂ©pĂ´t, and Dick's Lumber). The firm's stores offer products and services for home decorating, maintenance, repair, and remodeling, with maintenance and repair accounting for two-thirds of products sold. Lowe's targets retail do-it-yourself (around 75% of sales) and do-it-for-me customers as well as commercial and professional business clients (around 25% of sales). It is estimated that Lowe's captures a high-single-digit share of the domestic home improvement market, based on U.S. Census data and management's market size estimates.
Performance and Challenges
Total sales for the quarter were $21.4 billion, compared to $22.3 billion in the prior-year quarter. Comparable sales for the quarter decreased by 4.1%, primarily due to a decline in DIY big-ticket discretionary spending, which was partially offset by positive comparable sales in Pro and online segments. The performance is significant as it reflects the company's ability to navigate a challenging retail environment, marked by fluctuating consumer spending patterns.
“We are pleased with our start to spring, driven by strong execution and enhanced customer service,” said Marvin R. Ellison, Lowe’s chairman, president, and CEO. “This quarter we rolled out our new DIY loyalty program nationally, expanded same-day delivery options, and took market share in key categories. We continue to gain momentum with our Total Home strategy, reflected in our growth in Pro and online. I would like to thank our frontline associates for their hard work, commitment to customers, and disciplined focus on productivity.”
Financial Achievements
Despite the challenges, Lowe's Companies Inc (LOW, Financial) reported several financial achievements. The company repurchased approximately 3.0 million shares for $743 million and paid $633 million in dividends during the quarter. These actions are part of a disciplined capital allocation program aimed at generating long-term, sustainable shareholder value.
Key Financial Metrics
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Total Sales | $21.4 billion | $22.3 billion |
| Net Earnings | $1.8 billion | $2.3 billion |
| Diluted EPS | $3.06 | $3.77 |
| Comparable Sales | -4.1% | Not provided |
Analysis and Outlook
The decrease in comparable sales and total revenue indicates a challenging retail environment, particularly in the DIY segment. However, the company's strategic initiatives, such as the new DIY loyalty program and expanded same-day delivery options, are expected to drive future growth. The affirmation of the full-year 2024 outlook, with total sales expected to be between $84 billion and $85 billion and diluted EPS between $12.00 and $12.30, reflects management's confidence in its strategic direction.
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Explore the complete 8-K earnings release (here) from Lowe's Companies Inc for further details.
