Why Lowe's Stock Surged Today

Shares ofLowe’s Companies (NYSE:LOW)popped 9.6% on Wednesday after the home improvement retailer delivered solid second-quarter results.

So what

Lowe’s total sales rose 1% year over year to $27.6 billion. That was above Wall Street’s estimates for revenue of $26.9 billion.

The better-than-expected performance was driven by robust growth in Lowe’s professional and installation services. Sales in those segments increased 21% and 10%, respectively. A 7% rise in e-commerce sales also contributed to the gains.

A carpenter is blowing sawdust off a wooden table. g.foolcdn.com/image/?url=https%3A//g.foolcdn.com/editorial/images/639883/home-improvement-gettyimages-614128222.jpg&w=1000&op=resize 1000w, g.foolcdn.com/image/?url=https%3A//g.foolcdn.com/editorial/images/639883/home-improvement-gettyimages-614128222.jpg&w=2000&op=resize 2000w”/>

Lowe’s Companies is winning more business from professional contractors. Image source: Getty Images.

“Our strong results this quarter demonstrate that our Total Home strategy is working, withU.S.sales comps up 32% on a two-year basis,” CEO Marvin Ellison said in a press release.

Better still, the company’s productivity initiatives are helping Lowe’s become more profitable as it expands its revenue base. Its adjusted earnings, in turn, jumped 13% to $4.25 per share. That, too, bested analysts’ expectations, which had called for earnings per share of only $4.01.

Now what

These results prompted management to boost its full-year sales forecast from $86 billion to $92 billion. Lowe’s also expects its operating margin to improve to 12.2%, up from 10.8% in 2020.

“Looking forward, I am confident in the positive outlook for our industry, and our ability to drive operating margin expansion and market share gains,” Ellison said.

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