While Lowe’s reported that its results were pressured by operating margins, the home improvement retailer still boosted its net sales, comps and earnings in the second quarter.
Although the company conceded that it sacrificed some operating margin to build sales, Lowe’s still recorded second quarter net earnings of $1.42 billion, or $1.68 per diluted share, versus $1.17 billion, or $1.31 per diluted share, in the period a year previous.
According to Lowe’s, results included one-time factors including a $96 million second quarter 2017 gain from the sale of its interest in an Australian joint venture. With the discrete factors excluded, adjusted diluted earnings per share increased to $1.57 from $1.37 in the 2016 quarter. Lowe’s adjusted diluted earnings per share missed a Zack’s Investment Research analyst average estimate of $1.62.
Lowe’s stated that comparable sales for the home improvement business in the U.S. increased 4.6% versus the prior-year quarter. The company reported net sales of $19.5 billion as compared with $18.26 billion in the quarter a year earlier. Operating income was $2.38 billion in the quarter versus $2.05 billion in the year-before period.
“We are pleased with our improved comparable sales performance relative to last quarter, and the strong momentum we built throughout the second quarter culminating in a 7.9% comparable sales increase for the month of July,” said Robert Niblock, Lowe’s chairman, president and CEO. “While our results were below our expectations in the first half of this year, the team remains focused on making the necessary investments to improve the customer experience and drive sales. This includes amplifying our consumer messaging and incremental customer-facing hours in our stores, which will put pressure on our operating margin. We believe this is the right strategy to more fully capitalize on strong traffic trends in what we believe is a supportive macroeconomic backdrop for home improvement.”