Lowe’s (LOW) 4Q16 Results: Tops EPS and Revenue Expectations; Issues Strong 2017 Guidance amid Robust Housing Market

Executive Summary

• Lowe’s reported 4Q16 adjusted EPS of $0.86, up 45.8% from the year-ago quarter and beating the consensus estimate of $0.79. The company reported revenue of $15.78 billion, up 19.2% from the year-ago quarter and above the $15.37 billion consensus estimate.
• Same-store sales rose by1% during the quarter, beating the 2.4% consensus estimate. Comp sales for the US were up 5.1% as well. Comps were driven by a 4.0% increase in average ticket and a 1.1% increase in customer transactions.
• The company expects total revenue to grow by about 5% in FY17, to about $68.27 billion, and it expects full-year comp growth of 3.5%. The consensus estimate calls for revenues of $67.66 billion. The company expects FY17 EPS of $4.64, up about 16.3% from FY16 and above the consensus estimate of $4.53.