Lowe’s Cos . said its sales for the recent quarter grew, continuing gains and yielding more online orders during the Covid-19 pandemic, though profit fell because of higher expenses.
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The Mooresville, N.C.-based home-improvement retailer on Wednesday posted a profit of $692 million for the third quarter, or 91 cents a share, compared with $1.05 billion, or $1.36 a share, in the comparable quarter last year.
Adjusted earnings were $1.98 a share, meeting expectations of analysts polled by FactSet.
Sales rose 28% to $22.31 billion. Analysts were looking for $21.17 billion. Sales grew 30% for the second quarter.
Sales on Lowes.com more than doubled. Sales in all merchandising departments grew more than 15%, while all regions’ sales rose more than 20%, President and Chief Executive Marvin Ellison said.
Comparable sales grew 30.1%, and comparable sales for U.S. home improvement rose 30.4%.
Selling, general and administrative expenses grew to $4.77 billion from $3.77 billion.
During the quarter, the company spent $245 million in Covid-related support for frontline hourly associates, it said.
Lowe’s said it expects to buy back $3 billion in stock for the fourth quarter.
Rival Home Depot Inc. on Tuesday recorded a 23% increase in revenue on a higher profit of $3.43 billion.
For the fourth quarter, Lowe’s said it expects earnings of $1.10 a share to $1.20 a share on a reported and adjusted basis. It sees comparable sales growth of about 15% to 20% from a year ago.
For the fourth quarter in the prior year, the company posted earnings of 66 cents a share on sales of $16.03 billion.
Lowe’s expects fourth-quarter adjusted operating income as a percentage of sales to be about flat compared with the prior-year period due to Covid-19-related operating expenses, $150 million in expenses related to the overhaul of the layout of its U.S. stores and investments for its supply-chain network.
The company previously withdrew its financial guidance for the full year and declined to provide new guidance, citing uncertainty during the pandemic.
Shares fell 6% to $152.15 in premarket trading.
Write to Dave Sebastian at [email protected]