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Shares of the North Carolina-based company rose about 4% in premarket trading after it also topped Wall Street estimates for third-quarter results.
Higher mortgage rates are keeping consumers from buying new homes and instead renovating their existing properties, which has buoyed demand at home improvement chains at a time when spending on paint and tools has slowed from the pandemic peak.
Lowe’s (NYSE:LOW) upbeat earnings forecast comes in contrast with comments from larger rival Home Depot Inc (NYSE:HD), which on Tuesday left its annual forecasts unchanged despite beating quarterly estimates, blaming “mixed signals” around demand amid a slowing housing market.
Lowe’s said comparable sales rose 2.2% in the quarter, beating analysts’ forecast of 0.9% growth, thanks to strong demand from contractors and professional builders as well as improving demand from do-it-yourself customers, who bring in about 75% of its total revenue.
The company said it now expects full-year adjusted earnings of $13.65 to $13.80 per share, compared with its prior estimate of $13.10 to $13.60.
Analysts on average forecast annual profit of $13.54 per share, Refinitiv IBES data showed.
Lowe’s quarterly net sales rose to $23.48 billion from $22.92 billion a year earlier, topping analysts’ estimates of $23.13 billion.
Excluding one-off items, Lowe’s earned $3.27 per share in the three months to Oct. 28, also beating expectations for a profit of $3.10 per share.
The company, however, tightened its annual sales forecast, seeing comparable sales between a 1% decline and flat compared to last year. It had previously forecast sales toward the bottom end of a range from a 1% decline to a 1% rise.
