Lowe’s Reports Fourth Quarter 2022 Sales and Earnings Results

Lowe’s Companies, Inc. has reported net earnings of $957 million and diluted earnings per share (EPS) of $1.58 for the quarter ended Feb. 3, 2023, compared to diluted EPS of $1.78 in the fourth quarter of 2021. Excluding the pre-tax transaction costs associated with the sale of the Canadian retail business, fourth quarter adjusted diluted EPS increased 28% to $2.28 compared to the prior year.

Total sales for the fourth quarter were $22.4 billion compared to $21.3 billion in the fourth quarter of 2021. Comparable sales for the fourth quarter decreased 1.5%, and comparable sales for the U.S. home improvement business decreased 0.7%.

The fourth quarter of fiscal 2022 consisted of 14 weeks, compared with 13 weeks for the prior year. The 14th week added approximately $1.4 billion in sales for the quarter and the year. Comparable sales are based on a comparable number of weeks from the prior year.

In the fourth quarter, the company awarded $220 million in discretionary and profit-sharing bonuses to associates, including $70 million for our assistant store managers and supply chain supervisors and $150 million for eligible hourly associates.

“We continue to make strides on our Total Home strategy, with 10% Pro growth in the U.S. and 5% increase in Lowes.com sales. In recognition of the front-line leaders and associates who delivered these results, we are pleased to award $220 million in discretionary and profit-sharing bonuses,” commented Marvin R. Ellison, Lowe’s chairman, president and CEO. 

Full Year 2023 Outlook — a 52-week Year (comparisons to full year 2022 — a 53-week year)

  • Total sales of approximately $88 – $90 billion
  • Comparable sales expected to be flat to down -2% as compared to prior year
  • Operating income as a percentage of sales (operating margin) of 13.6% to 13.8%
  • Effective income tax rate of approximately 25%
  • Diluted earnings per share of $13.60 to $14.00
  • Capital expenditures of up to $2 billion

Source: PR Newswire

Walmart Raises Full-Year Guidance, as Earnings Beat on Boost From Grocery and Online Businesses

Walmart raised its full-year forecast, as fiscal first-quarter sales rose nearly 8% and its large grocery business helped offset weaker sales of clothing and electronics. Shares of the company closed about 1% higher on May 18, as the company beat Wall Street’s earnings and revenue expectations.

Walmart lifted its guidance to reflect the earnings beat. It said it now anticipates consolidated net sales will rise about 3.5% in the fiscal year. It expects adjusted earnings per share for the full year will be between $6.10 and $6.20, roughly in line with analysts’ expectations, according to Refinitiv.

CFO John David Rainey said consumers are buying fewer discretionary items, waiting for promotions before making pricey purchases like TVs and trading down to lower-priced items, such as buying a smaller box of cereal.

Yet shoppers are still spending, he added. “We’re seeing in these economic indicators that there is some strain on the consumer, but the resilience has surprised us,” he told CNBC. “And I think that’s in part probably because balance sheets are much stronger than they were pre-pandemic, even at this point.”

Here’s what Walmart reported for the three-month period that ended April 30, according to Refinitiv consensus estimates:

  • Earnings per share: $1.47 adjusted vs. $1.32 expected
  • Revenue: $152.30 billion vs. $148.76 billion expected

Walmart’s quarterly results provided the latest snapshot of the health of the American consumer. Walmart’s sales reflected a shift toward groceries and essentials, Rainey said. Yet unlike some competitors, the big-box retailer is well suited for that change as the nation’s largest grocer.

Nearly 60% of its annual U.S. sales come from groceries. In the quarter, sales of general merchandise in the U.S. declined mid single-digits, while sales of food and consumables increased low double-digits, Rainey said. The mix, however, weighed on the company’s first-quarter gross margin rate, which declined year over year, since food has slimmer margins than other merchandise.

Net income for the big-box retailer fell to $1.67 billion, or 62 cents per share, compared with $2.05 billion, or 74 cents per share, a year earlier. Total revenue rose to $152.30 billion from $141.57 billion in the year-ago period, beating Wall Street’s expectations.

As inflation factors into Americans’ spending decisions, the retail giant has attracted new and more frequent shoppers — including younger and wealthier customers, Rainey said. Same-store sales for Walmart U.S. climbed 7.4%, excluding fuel. The key industry metric includes sales from stores and clubs open for at least a year. At Sam’s Club, same-store sales rose 7% year over year excluding fuel, driven by grocery sales.

Online growth was one of the bright spots of the quarter for Walmart. E-commerce sales jumped 27% year over year for Walmart U.S. At Sam’s Club, e-commerce sales grew 19%. At Walmart, curbside pickup and home delivery of online purchases fueled the growth, Rainey said.

Despite the sales growth, Rainey said spending trends weakened as the quarter went on, with the sharpest drop after February. He attributed that, in part, to the end of pandemic-related emergency funding from the Supplemental Nutrition Assistance Program and a decline in tax refund amounts. 

CEO Doug McMillon said persistently higher prices on everyday items like food and paper goods continue to squeeze families’ budgets month after month, leaving less money to spend in other ways. He said that stubborn inflation “is one of the key factors creating uncertainty for us in the back half of the year.”

Walmart said for the fiscal second quarter, it expects consolidated net sales to increase about 4% and adjusted earnings per share to range between $1.63 and $1.68. That is lower than the $1.71 per share that Wall Street expected, according to Refinitiv consensus estimates.

Source: CNBC

Target Q1 2023 Earnings: A Surprising Show Of Strength

Target has reported financial results from its first quarter of 2023. Highlights are as follows:

  • Target’s Q1 2023 sales exceeded analysts’ expectations, with revenue reaching $25.32 billion, a 0.6% year-over-year increase.
  • Despite the revenue increase, the company reported a decline in profits and cash flows, with earnings per share at $2.05, down from $2.16 a year earlier.
  • Target’s performance, along with Walmart and Costco, suggests consumer demand remains resilient, but the strength of the economy could increase the risk of a hard landing.

To view the full results, visit the Seeking Alpha website. 

Source: Seeking Alpha