Lowe's gross margin contraction in Q1 weigh on FY2019 earnings guidance, shares down 9% premarket

May 22, 2019 6:40 AM ETLowe's Companies, Inc. (LOW)By: Niloofer Shaikh, SA News Editor4 Comments
  • Lowe's (NYSE:LOW) reports comparable-store sales rose 3.5% in Q1 vs. consensus of +3%.
  • Comp for the U.S. home improvement business grew 4.2%.
  • Gross margin rate down 165 bps to 31.46%.
  • SG&A expense rate improved 89 bps to 21.77%.
  • Merchandise inventory +13.8% to $15.03B.
  • Home improvement and hardware stores -152 Y/Y to 2,002.
  • The company repurchased $818M of stock and paid $385M in dividends during the quarter.
  • FY2019 Guidance: Total sales: ~+2%; Comparable-store sales: ~+3%; Operating margin rate: +310 bps to +345 bps; Adjusted operating rate: +20 bps to +50 bps; Tax rate: ~24%; Diluted EPS: $5.54 to $5.74; Adjusted EPS: $5.45 to $5.65.
  • LOW -8.77% premarket.
  • Previously: Lowe's misses by $0.11, beats on revenue (May 22)

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