What to search for when Lowe’s (LOW) stories Q3 2023 earnings

Shares of Lowe’s Corporations, Inc. (NYSE: LOW) stayed inexperienced on Monday. The inventory has gained 8% over the previous one month. The house enchancment retailer is ready to report its third quarter 2023 earnings outcomes on Tuesday, November 21, earlier than market open. Right here’s a have a look at what to anticipate from the earnings report:

Income

Analysts are projecting income of $20.9 billion for Lowe’s in Q3 2023. This compares to income of $23.5 billion reported in the identical quarter a 12 months in the past. In Q2 2023, web gross sales decreased 9% year-over-year to $25 billion.

Earnings

The consensus estimate for Q3 2023 EPS is $3.03, which compares to EPS of $3.27 reported within the prior-year quarter. In Q2 2023, EPS fell 2% to $4.56.

Factors to notice

It’s probably that in Q3 Lowe’s would possibly see a continuation of the developments seen final quarter with prospects specializing in smaller initiatives than bigger remodels. It may additionally expertise stress in big-ticket discretionary classes. Lumber deflation is prone to have an effect on the highest line and comps.

The Professional phase is prone to outperform the DIY phase with Professional backlogs anticipated to stay wholesome. Professional-heavy classes like constructing supplies and tough plumbing are prone to stay resilient amid the overall softness.

Within the second quarter, Lowe’s comparable gross sales dropped 1.6%. On its convention name, the corporate stated that for Q3, it is going to be biking over the hardest comparability of the 12 months because it delivered plus 3% comparable gross sales within the US final 12 months.

Lowe’s investments in its Complete House technique and its omnichannel capabilities alongside its perpetual productiveness enchancment (PPI) initiatives are anticipated to assist drive development for the corporate. Components resembling dwelling value appreciation, getting old housing inventory, millennial family formation, getting old in place and distant work are additionally anticipated to behave as tailwinds for the house enchancment retailer.

Lowe’s competitor House Depot (NYSE: HD) reported its third quarter 2023 earnings outcomes final week. HD beat expectations on each income and earnings however narrowed its steerage for the complete 12 months of 2023. It will likely be price watching whether or not Lowe’s revises its steerage as properly.