Lowe’s (LOW) 1Q17 Results: Miss on EPS and Sales Yet Growth Continues

Executive Summary

• Lowe’s reported 1Q17 adjusted EPS of $1.03, up 18.4% from the year-ago quarter, but below the $1.06 consensus estimate. The company reported revenue of $16.86 billion, below the $16.95 billion consensus estimate, but up 10.7% from the year-ago quarter.
• Same-store sales rose by 9% during the quarter, below the 3.1% consensus estimate. Comp sales for the US were up 2%. Comps were driven by a 3.5% increase in average ticket, which was partially offset by a 1.5% decline in customer transactions due to weaker performance in outdoor categories.
• The company reaffirmed its FY17 revenue guidance of an increase of 5%, implying $68.27 billion in full-year revenue, slightly below the $68.36 billion consensus estimate. Lowe’s expects full-year comp growth of 3.5% versus the 3.6% consensus estimate. The company lowered its FY17 EPS guidance and now expects EPS of $4.30 versus prior guidance of $4.64 and compared with the $4.65 consensus estimate.