Executive Summary

• Lowe’s reported adjusted 1Q16 EPS of $0.87, excluding an $0.11 benefit related to an unrealized gain on a foreign currency hedge, versus the consensus estimate of $0.85.
• Total revenues were $15.23 billion versus consensus of $14.87 billion. Comps were up 7.3% versus consensus of 4.7%. Comps for the US home improvement business increased by 7.5%. Both transactions and average ticket increased in the period, driving higher-than-planned sales.
• Management reaffirmed its full-year guidance for EPS of $4.00, excluding the $0.11 benefit related to an unrealized gain on a foreign currency hedge. That is based on expected revenue growth of 6%, which implies sales of $62.62 billion versus consensus of $62.73 billion. Comps are expected to increase by 4% versus consensus of 4.2%.