NEW YORK (CNN/Money) -
Lowe's Cos. Inc. logged a higher fiscal third-quarter profit Monday, beating Wall Street expectations as the company benefited from a surge in refinancing that has fueled home improvement.
The No. 2 U.S. home improvement chain behind Home Depot (HD: up $0.53 to $28.85, Research, Estimates) has been gaining on its rival, offering a somewhat wider assortment of products, opening new stores and bumping up customer service. Atlanta-based Home Depot has been struggling of late as it streamlines inventory and searches for new avenues of growth while its store expansion matures.
Lowe's said it earned $339.2 million, or 43 cents a share, up from earnings of $250.5 million, or 32 cents a share, a year earlier. Analysts polled by earnings tracker First Call expected a profit of 40 cents a share.
The company also raised fourth-quarter and full-year expectations. For the fourth quarter, Lowe's expects a profit of 33 cents a share, a penny higher than the 32 cents a share Wall Street forecast. For the year, the retailer sees earnings of $1.78 a share, higher than the $1.75 a share forecast, according to First Call.
Third-quarter sales increased 17.6 percent to $6.41 billion from $5.45 billion.
Shares of Wilkesboro, N.C.-based Lowe's (LOW: down $0.35 to $42.15, Research, Estimates) were up slightly in early trading Monday on the New York Stock Exchange.
Lowe's said sales at stores open at least a year, a key retailing gauge known as same-store sales, increased 4.1 percent in the quarter from a year ago.
"The strong third-quarter sales and earnings results our stores delivered signify the continued strength of the home improvement consumer in an otherwise uncertain economic environment," CEO Robert Tillman said in a statement. "... Demographic and societal trends continue to provide longer-term opportunity for our company as Americans increase their focus on the comforts of home."
During the fourth quarter, which includes the critical holiday season, Lowe's expects a 2-to-4 percent increase in same-store sales.
For the year, Lowe's expects a 5 percent same-store sales increase and a 20 percent increase in total sales. The company expects to have opened 123 new stores by year's end, representing 17-to-18 percent square footage growth.
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