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Lowe's (LOW) Q4 Earnings & Sales Top Estimates, View Up
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Lowe’s Companies, Inc. (LOW - Free Report) delivered splendid fourth-quarter fiscal 2021 results, as both the top and the bottom lines grew year over year and surpassed the Zacks Consensus Estimate. LOW delivered the 11th straight earnings beat and the eighth consecutive sales surprise.
Lowe’s delivered a robust performance in 2021, which benefited from the solid execution of the Total Home strategy. The strategy helped LOW gain a market share across Pro and DIY customers last year. Focus on driving productivity and efficient pricing drove operating margin growth of 170 basis points or bps in 2021.
Shares of the home-improvement retailer gained nearly 3% in the pre-market trading session on Feb 23. This presently Zacks Rank #2 (Buy) player’s shares have gained 5.5% in the past six months compared with the industry’s growth of 7.3%.
Quarter in Detail
Earnings per share (EPS) of $1.78 surpassed the Zacks Consensus Estimate of $1.72 and rose 34% from adjusted EPS of $1.33 recorded in the fourth quarter of fiscal 2020. Sales growth and margin expansion seemed to have supported the bottom line.
Lowe's Companies, Inc. Price, Consensus and EPS Surprise
Net sales of $21,339 million moved up 5.1% year over year and surpassed the Zacks Consensus Estimate of $20,818 million. Comparable sales increased 5% in the quarter under review. Comparable sales for the U.S. home-improvement business increased 5.1% in the reported quarter. Pro customer sales jumped 23%. Comparable sales rose 6.9% in 2021.
Gross profit increased 8.8% year over year to $7,027 million, while gross margin expanded 115 bps to 33.1%. Operating income amounted to $1,849 million, up 21.3% year over year. Operating margin expanded 117 bps to 8.67%.
Other Financial Aspects & Developments
LOW ended the quarter with cash and cash equivalents of $1,133 million, long-term debt (excluding current maturities) of $23,859 million and shareholders’ deficit of $4,816 million.
Lowe’s generated cash flow from operations of $10,113 million for the 12 months ended Jan 28, 2022. Capital expenditures amounted to $1,853 million. For fiscal 2022, LOW expects capital expenditures of nearly $2 billion.
In the reported quarter, Lowe’s bought back around 16 million shares for $4 billion and paid out dividends of $551 million. For the full year, Lowe’s repurchased 63 million shares for $13.1 billion and paid out dividends worth $2 billion. LOW expects to repurchase nearly $12 billion worth of shares in 2022.
As of Jan 28, 2022, Lowe’s operated 1,971 home-improvement and hardware stores across the United States and Canada. LOW serviced nearly 230 dealer-owned stores.
Lowe’s has been investing in providing a pandemic-related support to frontline hourly associates through bonuses and incentives. In the fiscal fourth quarter, Low paid Winning Together profit-sharing bonus across all Lowe’s stores. This marks the eighth consecutive quarter wherein 100% of Lowe's stores earned a Winning Together profit-sharing bonus. During the quarter, management paid $94 million to frontline hourly associates, above the targeted level by $24 million. Also, in the same period, management paid a discretionary year-end bonus of $265 million to front-line workers for their hard work amid the pandemic in 2021.
Outlook
Lowe’s delivered an impressive performance during fiscal 2021. Management highlighted that the solid sales trends continued into February. Despite an uncertain business landscape, management raised guidance for 2022.
LOW now expects revenues of $97-99 billion (including the 53rd week), up from the prior prediction of $94-97 billion (issued in December 2021). The 53rd week is likely to boost sales by $1-$1.5 billion. In 2021, Lowe’s revenues amounted to $96.3 billion. The Zacks Consensus Estimate for fiscal 2022 revenues is currently pegged at $96.4 billion.
Comparable sales in 2022 are envisioned in the range of a decline of 1% to a rise of 1%. The metric was earlier predicted in the range of a 3% decline to flat compared with the last fiscal year’s reported number.
Lowe’s now expects the gross margin rate to improve slightly year over year. In its December 2021 release, management projected the gross margin to be flat year over year. The operating margin is expected to be 12.8-13%, up from the prior view of 12.5-12.8%.
Builders FirstSource, a manufacturer and supplier of building materials, manufactured components and construction services, sports a Zacks Rank #1 (Strong Buy) at present. BLDR’s shares have risen 38.2% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Builders FirstSource’s 2022 sales suggests a drop of 8.2% from the year-ago period’s reading. BLDR has a trailing four-quarter earnings surprise of 71.5%, on average.
Fastenal, a national wholesale distributor of industrial and construction supplies, currently has a Zacks Rank of 2. FAST has a trailing four-quarter earnings surprise of 3.3%, on average.
The Zacks Consensus Estimate for Fastenal’s current financial-year sales suggests growth of 12.6% from the year-ago period’s tally. FAST has an expected EPS growth rate of 9% for three to five years.
Dollar Tree, the operator of discount variety retail stores, holds a Zacks Rank #2 at present. Dollar Tree has a trailing four-quarter earnings surprise of 8.8%, on average. DLTR has an expected EPS growth rate of 12.2% for three to five years.
The Zacks Consensus Estimate for DLTR’s current financial-year sales suggests growth of 3.4% from the year-ago period’s reported figure.
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Lowe's (LOW) Q4 Earnings & Sales Top Estimates, View Up
Lowe’s Companies, Inc. (LOW - Free Report) delivered splendid fourth-quarter fiscal 2021 results, as both the top and the bottom lines grew year over year and surpassed the Zacks Consensus Estimate. LOW delivered the 11th straight earnings beat and the eighth consecutive sales surprise.
Lowe’s delivered a robust performance in 2021, which benefited from the solid execution of the Total Home strategy. The strategy helped LOW gain a market share across Pro and DIY customers last year. Focus on driving productivity and efficient pricing drove operating margin growth of 170 basis points or bps in 2021.
Shares of the home-improvement retailer gained nearly 3% in the pre-market trading session on Feb 23. This presently Zacks Rank #2 (Buy) player’s shares have gained 5.5% in the past six months compared with the industry’s growth of 7.3%.
Quarter in Detail
Earnings per share (EPS) of $1.78 surpassed the Zacks Consensus Estimate of $1.72 and rose 34% from adjusted EPS of $1.33 recorded in the fourth quarter of fiscal 2020. Sales growth and margin expansion seemed to have supported the bottom line.
Lowe's Companies, Inc. Price, Consensus and EPS Surprise
Lowe's Companies, Inc. price-consensus-eps-surprise-chart | Lowe's Companies, Inc. Quote
Net sales of $21,339 million moved up 5.1% year over year and surpassed the Zacks Consensus Estimate of $20,818 million. Comparable sales increased 5% in the quarter under review. Comparable sales for the U.S. home-improvement business increased 5.1% in the reported quarter. Pro customer sales jumped 23%. Comparable sales rose 6.9% in 2021.
Gross profit increased 8.8% year over year to $7,027 million, while gross margin expanded 115 bps to 33.1%. Operating income amounted to $1,849 million, up 21.3% year over year. Operating margin expanded 117 bps to 8.67%.
Other Financial Aspects & Developments
LOW ended the quarter with cash and cash equivalents of $1,133 million, long-term debt (excluding current maturities) of $23,859 million and shareholders’ deficit of $4,816 million.
Lowe’s generated cash flow from operations of $10,113 million for the 12 months ended Jan 28, 2022. Capital expenditures amounted to $1,853 million. For fiscal 2022, LOW expects capital expenditures of nearly $2 billion.
In the reported quarter, Lowe’s bought back around 16 million shares for $4 billion and paid out dividends of $551 million. For the full year, Lowe’s repurchased 63 million shares for $13.1 billion and paid out dividends worth $2 billion. LOW expects to repurchase nearly $12 billion worth of shares in 2022.
As of Jan 28, 2022, Lowe’s operated 1,971 home-improvement and hardware stores across the United States and Canada. LOW serviced nearly 230 dealer-owned stores.
Lowe’s has been investing in providing a pandemic-related support to frontline hourly associates through bonuses and incentives. In the fiscal fourth quarter, Low paid Winning Together profit-sharing bonus across all Lowe’s stores. This marks the eighth consecutive quarter wherein 100% of Lowe's stores earned a Winning Together profit-sharing bonus. During the quarter, management paid $94 million to frontline hourly associates, above the targeted level by $24 million. Also, in the same period, management paid a discretionary year-end bonus of $265 million to front-line workers for their hard work amid the pandemic in 2021.
Outlook
Lowe’s delivered an impressive performance during fiscal 2021. Management highlighted that the solid sales trends continued into February. Despite an uncertain business landscape, management raised guidance for 2022.
LOW now expects revenues of $97-99 billion (including the 53rd week), up from the prior prediction of $94-97 billion (issued in December 2021). The 53rd week is likely to boost sales by $1-$1.5 billion. In 2021, Lowe’s revenues amounted to $96.3 billion. The Zacks Consensus Estimate for fiscal 2022 revenues is currently pegged at $96.4 billion.
Comparable sales in 2022 are envisioned in the range of a decline of 1% to a rise of 1%. The metric was earlier predicted in the range of a 3% decline to flat compared with the last fiscal year’s reported number.
Lowe’s now expects the gross margin rate to improve slightly year over year. In its December 2021 release, management projected the gross margin to be flat year over year. The operating margin is expected to be 12.8-13%, up from the prior view of 12.5-12.8%.
3 More Retail Stocks for You
Here are three other top-ranked stocks, including Builders FirstSource, Inc. (BLDR - Free Report) , Fastenal Company (FAST - Free Report) and Dollar Tree (DLTR - Free Report) .
Builders FirstSource, a manufacturer and supplier of building materials, manufactured components and construction services, sports a Zacks Rank #1 (Strong Buy) at present. BLDR’s shares have risen 38.2% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Builders FirstSource’s 2022 sales suggests a drop of 8.2% from the year-ago period’s reading. BLDR has a trailing four-quarter earnings surprise of 71.5%, on average.
Fastenal, a national wholesale distributor of industrial and construction supplies, currently has a Zacks Rank of 2. FAST has a trailing four-quarter earnings surprise of 3.3%, on average.
The Zacks Consensus Estimate for Fastenal’s current financial-year sales suggests growth of 12.6% from the year-ago period’s tally. FAST has an expected EPS growth rate of 9% for three to five years.
Dollar Tree, the operator of discount variety retail stores, holds a Zacks Rank #2 at present. Dollar Tree has a trailing four-quarter earnings surprise of 8.8%, on average. DLTR has an expected EPS growth rate of 12.2% for three to five years.
The Zacks Consensus Estimate for DLTR’s current financial-year sales suggests growth of 3.4% from the year-ago period’s reported figure.