AP News

Earnings Preview: Lowe's seen posting 3Q profit


NEW YORK (AP) — Home-improvement chain Lowe's Cos. is set to report its fiscal third-quarter earnings result before the market opens Monday. Analysts will be watching for evidence that the home improvement retailer is benefiting from early signs of a housing market recovery.

WHAT TO WATCH FOR: Although still below healthy levels, the housing market has started to recover this year, with home sales and prices rising from recession lows.

Investors want to know if Lowe's results mirror Home Depot's, which reported on Tuesday that its net income rose, boosted in part by the housing market recovery.

They'll also be hoping for an update on Lowe's plans to revamp its merchandise and prices to boost earnings.

Last summer Lowe's returned to offering permanent low prices on many items across the store, instead of offering fleeting discounts. That strategy has not paid off yet. Last quarter the company said it will take until the middle of next year to reap the benefits of the strategy. Previously Lowe's said it would happen by the end of this year. Last quarter the company also said it was working on having a better balance between temporary promotions and permanent discounts based on what it's learned from shoppers.

During the quarter Lowe's also withdrew its bid for Rona Inc., a Canadian home improvement chain.

WHY IT MATTERS: Strong sales would be a sign that consumers are able to spend more. Consumer spending is closely watched because it accounts for 70 percent of economic activity.

WHAT'S EXPECTED: Analysts expect earnings of 36 cents per share on revenue of $11.93 billion, according to FactSet.

LAST YEAR'S QUARTER: Lowe's reported net income of 35 cents per share, excluding one-time items, on revenue of $11.9 billion.


American Apparel's Future
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus