Driven by resurgence in the U.S. housing market,
Lowe's Companies Inc
) posted robust results for the third quarter of fiscal 2013,
with earnings rising 34.3% year over year to 47 cents per share.
However, quarterly earnings missed the Zacks Consensus Estimate
by a penny.
This Zacks Rank #3 (Hold) stock witnessed a 7.3% rise in total
revenue to $12,957 million and handily beat the Zacks Consensus
Estimate of $12,703 million. Moreover, comparable-store sales
rose 6.2% on a consolidated basis in the quarter.
The year-over-year top-line growth was primarily driven by the
company's better capitalization of the rebounding domestic
housing market. During the quarter, Lowe's witnessed solid
performances across all product categories.
In dollar terms, gross profit rose 8.2% year over year to
$4,481 million. However, gross profit margin remained almost flat
year over year at 34.58% in the quarter as the benefit of
increased top line was fully offset by rise in cost of goods
Other Financial Aspects
Lowe's ended the quarter with cash and cash equivalents of
$1,101 million, long-term debt (excluding current maturities) of
$10,090 million and shareholders' equity of $12,651 million,
reflecting a debt-to-capitalization ratio of 44.4%.
During the quarter, the company repurchased $761 million worth
of its common stock and distributed $191 million through
Fiscal 2013 Outlook
Buoyed by better-than-expected quarterly results, the company
raised its outlook for fiscal 2013. Lowe's now expects sales to
rise by nearly 6% and comparable store sales by about 5%.
Earlier, Lowe's had anticipated sales and comparable store sales
to increase 5% and 4.5%, respectively. Further, management raised
its earnings expectation for fiscal 2013 to $2.15 per share from
$2.10 forecasted earlier.
The company also raised its growth projection for earnings
before interest and taxes (EBIT) as a percentage of sales or
operating margins to 75 bps year over year in fiscal 2013,
against 65 bps projected previously.
Moreover, the company intends to open 9 stores in the
remainder of fiscal 2013. As of Nov 1, 2013, the company operated
1,831 locations in the United States, Canada and Mexico.
Other Stocks to Consider
Better performing stocks in the building product retail
industry space include
Builders FirstSource, Inc.
Lumber Liquidators Holdings, Inc.
The Home Depot, Inc.
). While Builders FirstSource has a Zacks Rank #1 (Strong Buy),
both Lumber Liquidators Holdings and The Home Depot carry a Zacks
Rank #2 (Buy).
BUILDERS FIRSTS (BLDR): Free Stock Analysis
HOME DEPOT (HD): Free Stock Analysis Report
LUMBER LIQUIDAT (LL): Free Stock Analysis
LOWES COS (LOW): Free Stock Analysis Report
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