Lowe's Lifts Sales Outlook as Holiday Shopping Boost Arrives Early
U.S News | November 17, 2021
Lowe's Cos Inc raised its full-year sales forecast as a decision to expedite product shipments helps the home improvement chain overcome widespread supply snarls and capitalize on an early start to holiday shopping by consumers.
The company's third-quarter earnings also trounced market expectations, riding on a surge in demand for tools and building materials from Americans investing in their properties during a pandemic housing boom. Its shares rose 2%.
Consumers are scooping up holiday and winter products such as snow blowers earlier than in previous years, Lowe's said, echoing comments made by Target. Despite the costs of bringing holiday products into its stores and warehouses earlier than originally planned, Lowe's gross margins expanded to 33.1% in the quarter from 32.7%. Lowe's earned a profit of $2.73 per share, beating estimates of $2.36 a share. The company said its expected 2021 sales of about $95 billion, compared with a previous forecast of about $92 billion.
The fatter margins, fueled by a focus on selling big-ticket items and lower spending, contrasted with figures from Walmart Inc and Target that have reeled under high supply chain costs. "With the market more focused on near-term gross margin trends than ever due to the supply chain issues, (Lowe's) beat handily on that line," D.A. Davidson analyst Michael Baker said.