Financial Data and Key Metrics - Q2 2024 sales were $23.6 billion, with comparable sales down 5.1% YoY [6] - Comparable average ticket increased by 0.8%, driven by strength in Pro-heavy categories [28] - Comparable transactions declined by 5.9%, primarily due to reduced DIY project spending and lower seasonal transactions [28] - Gross margin was 33.5%, down 19 basis points YoY due to supply chain investments, partially offset by lower transportation costs and PPI initiatives [28] - Adjusted SG&A was 17.3% of sales, deleveraging 87 basis points due to sales deleverage and cycling of a favorable legal settlement [29] - Adjusted operating margin rate declined by 114 basis points to 14.4% [29] - Inventory ended the quarter at $16.8 billion, down $581 million YoY [29] - Free cash flow generated was $2.7 billion, with $1 billion spent on share repurchases and $629 million paid in dividends [29] Business Line Performance - Pro business delivered mid-single-digit positive comps, while online sales grew by 2.9% [7][8] - Building products saw above-average comps in rough plumbing, electrical, and millwork, with positive comps in building materials [15] - Home decor faced pressure in big-ticket DIY discretionary projects, particularly in flooring, kitchen, and bath [17] - Appliances delivered above-average comps and double-digit growth in Pro sales [17] - Paint sales benefited from a partnership with Sherwin-Williams, offering free same-day delivery nationwide [18] - Outdoor power equipment saw strong performance with the addition of Toro to the lineup [18] - Tools segment expanded with private-branded Cobalt tools and the introduction of Klein Tools' KNECT system [19] Market Performance - Unfavorable weather impacted seasonal categories like lawn and garden, outdoor living, and exterior paint [18][28] - Pro growth was consistent across geographic divisions, with no notable regional differences outside of hurricane impacts [39] - Online sales growth was driven by improved conversion rates and expanded same-day delivery options [8] Strategy and Industry Competition - The company continues to invest in its Total Home strategy, focusing on Pro customers and online sales growth [7][13] - Lowe's is leveraging partnerships with Apple, NVIDIA, OpenAI, and Palantir to develop AI solutions for customer and associate experiences [10] - The company is modernizing its technology infrastructure and supply chain to improve operational efficiency [29][71] - Lowe's is focusing on innovation, such as the Lowe's Style Studio app with Apple Vision Pro, to enhance customer engagement [10] Management Commentary on Macro Environment - The macro environment remains challenging, with elevated interest rates and inflation impacting DIY discretionary spending [11][44] - Housing turnover is near its lowest levels since the mid-1990s due to the lock-in effect of higher mortgage rates [11] - Despite near-term challenges, the company remains optimistic about the medium- to long-term outlook for the home improvement industry, driven by home price appreciation, disposable income growth, and aging housing stock [12] Other Important Information - Lowe's launched the MyLowe's Rewards loyalty program nationwide in March, which has provided insights into customer purchasing trends [9] - The company is piloting in-store design experiences using Apple Vision Pro in three test markets [10] - Lowe's is working with suppliers to reduce costs and reinvest in marketing and merchandising strategies [21] Q&A Session Summary Question: Spread between DIY and Pro performance - The company believes it is gaining share in the Pro business but attributes DIY softness to macroeconomic factors rather than market share loss [36][37] - Geographic performance was consistent, with no notable differences outside of hurricane impacts [39] Question: Margin outlook for the second half - The margin outlook is influenced by the timing of merchandising PPI initiatives and comparisons to prior-year incentive compensation [41] - Gross margins are expected to be roughly flat for the full year [41] Question: Guidance cut and DIY demand recovery - The guidance cut reflects cautious consumer sentiment and macroeconomic challenges, particularly in big-ticket DIY discretionary spending [44][45] - The company remains optimistic about the Pro business but is cautious about the timing of a DIY recovery [44] Question: Pricing and promotional activity - Promotional activity remains stable, with no significant changes expected in the pricing environment [48][50] Question: Weather impact on Q2 comps - Unfavorable weather in May, June, and July pressured seasonal categories, impacting overall comps [54] Question: Gross margin outlook and vendor clawbacks - Gross margins are expected to improve in Q3 and Q4, with vendor clawbacks accelerating in the second half of the year [57] Question: Earnings algorithm and fixed cost leverage - The company expects its earnings algorithm to hold, with operating margin expansion contingent on top-line recovery [62][63] Question: Pro customer strategy and future initiatives - The company plans to expand its Pro customer base by enhancing fulfillment, digital engagement, and targeting underserved Pro segments [83] Question: Rural store performance and delivery impact - Rural stores performed in line with expectations, and the company is leveraging its digital platform to serve rural customers effectively [86] Question: Impact of potential Fed rate cuts - The company is uncertain about the exact rate level needed to stimulate demand but remains hopeful that lower rates will improve consumer sentiment and housing activity [90] Question: Long-term margin outlook - The company maintains its long-term margin target of 14.5%, contingent on a recovery in top-line growth [93] Question: Incremental risks in the business - The company is monitoring consumer sentiment, housing affordability, and the preference for services over goods as potential risks [96]

Lowe's (LOW) executives spent Tuesday's earnings call discussing the retailer's struggles with lower discretionary spending from consumers, along with its efforts to expand its market share among professional contractors and improve its digital experience. The comments came after Lowe's second-quarter revenue came in lower than expected, leading the retailer to lower its full-year projections for sales and profits as inflation has led many consumers to hold off on larger home-improvement projects. Lowe's s ...

About this content About Angela Harmantas Angela Harmantas is an Editor at Proactive. She has over 15 years of experience covering the equity markets in North America, with a particular focus on junior resource stocks. Angela has reported from numerous countries around the world, including Canada, the US, Australia, Brazil, Ghana, and South Africa for leading trade publications. Previously, she worked in investor relations and led the foreign direct investment program in Canada for the Swedish government ...

Lowe’s Companies, Inc. (LOW) came up with second-quarter fiscal 2024 results, wherein the top line fell short of the Zacks Consensus Estimate, while the bottom line surpassed the same. This Mooresville, NC-based company experienced a year-over-year decline in both metrics and continued with its trend of dismal comparable sales. The drop in big-ticket discretionary spending among Do-It-Yourself customers, along with adverse weather affecting seasonal and other outdoor categories, hurt the company’s performan ...

Tuesday, August 20th, 2024Today, we achieve peak late-August trading. Not in terms of stock market highs — we’re still off mid-June levels — but in terms of low volume, low activity. We remain in the final stages of Q2 earnings season, but aside from a couple speeches by Fed members later today, we have a dearth of potential impacts to the market.This is just as well — it allows hard-working people to enjoy their vacation without worrying about the need to re-route one’s portfolio. Market indexes are flatti ...

The home improvement market could use some improvement itself.That’s the latest from Lowe’s Companies Inc. During its second-quarter 2024 earnings call Tuesday (Aug. 20), the company revised its annual forecasts downward, citing a challenging macroeconomic environment dampening consumer spending on home improvement projects.As a result, and for the sixth straight quarter, Lowe’s posted a year-over-year sales decline.Total sales for the quarter were down 5.1% to $23.6 billion, compared to $25 billion a year ...

Lowe's Companies TodayLOWLowe's Companies$244.22 +1.01 (+0.42%) 52-Week Range$181.85▼$262.49Dividend Yield1.88%P/E Ratio19.62Price Target$250.19Add to WatchlistLowe’s Companies NYSE: LOW stock is in a holding pattern after the Q2 results revealed operational quality offset by a weakened sales outlook. The critical takeaway is that macroeconomic conditions impact sales while operational quality improves. As bad as the guidance seems, it’s not as bad as was feared, and the company is set up to gain leverage w ...

Key TakeawaysLowe's posted weaker-than-expected second quarter sales as discretionary spending on large home improvement projects was lower than the same time last year.Home Depot and Lowe's have been affected by a reduction in big-ticket spending in the home improvement sector as consumers deal with higher prices for essentials.Lowe's lowered its full-year outlooks for both sales and profit, citing the decline in DIY sales and a "pressured macroeconomic environment. Lowe's (LOW) reported weaker-than-expect ...

Sales Performance - Q2 2024 total sales were $23.6 billion, a decrease from $25.0 billion in the prior-year quarter[1] - Comparable sales decreased by 5.1% in Q2 2024, driven by reduced DIY discretionary spending and unfavorable weather[1] - Full-year 2024 total sales outlook updated to $82.7 to $83.2 billion, down from the previous $84 to $85 billion[5] - Full-year 2024 comparable sales expected to decline by -3.5% to -4.0%, compared to the prior estimate of -2% to -3%[5] - Pro customer segment showed mid-single-digit positive comparable sales in Q2 2024[2] Earnings and Profitability - Adjusted diluted EPS for Q2 2024 was $4.10, compared to $4.56 in Q2 2023[1] - Adjusted diluted EPS for full-year 2024 is projected to be $11.70 to $11.90, down from the previous $12.00 to $12.30[5] - Net earnings for the three months ended August 2, 2024, were $2.383 billion, representing 10.10% of sales[14] - Comprehensive income for the six months ended August 2, 2024, was $4.132 billion, or 9.19% of sales[14] - Adjusted diluted earnings per share for the three months ended August 2, 2024, was $4.10, excluding a $43 million pre-tax gain from the Canadian retail business transaction[21] Capital Allocation and Share Repurchases - The company repurchased 4.4 million shares for $1.0 billion and paid $629 million in dividends during Q2 2024[3] - Repurchases of common stock for the six months ended August 2, 2024, totaled $1.930 billion[18] Financial Position and Cash Flow - Cash and cash equivalents increased to $4.360 billion as of August 2, 2024, compared to $3.494 billion on August 4, 2023[16] - Merchandise inventory decreased to $16.841 billion as of August 2, 2024, from $17.422 billion on August 4, 2023[16] - Net cash provided by operating activities for the six months ended August 2, 2024, was $7.415 billion[18] - Long-term debt, excluding current maturities, decreased to $34.659 billion as of August 2, 2024, from $35.839 billion on August 4, 2023[16] - Total assets increased to $44.934 billion as of August 2, 2024, from $44.521 billion on August 4, 2023[16] Capital Expenditures - Capital expenditures for full-year 2024 are estimated at $2 billion[5] - Capital expenditures for the six months ended August 2, 2024, were $808 million[18] Store Operations - The company operated 1,746 stores with 194.9 million square feet of retail selling space as of Aug. 2, 2024[2]

Lowe's (LOW) came out with quarterly earnings of $4.10 per share, beating the Zacks Consensus Estimate of $3.96 per share. This compares to earnings of $4.56 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 3.54%. A quarter ago, it was expected that this home improvement retailer would post earnings of $2.94 per share when it actually produced earnings of $3.06, delivering a surprise of 4.08%.Over the last four quarters, the co ...