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Lowe’s 4Q profit miss overshadows impressive store sales

February 28, 2018

In this Friday, Feb. 23, 2018 photo sales associate Larry Wardford, of Holliston, Mass., places items on selves at a Lowe's retail home improvement and appliance store, in Framingham, Mass. Lowe's Companies Inc. reports financial results on Wednesday, Feb. 28, 2018. (AP Photo/Steven Senne)

NEW YORK (AP) — Lowe’s recorded profits in the fourth quarter despite a red-hot housing market.

Shares fell 8 percent before the opening bell as healthy same-store sales were overshadowed by the profit miss and lower overall revenue.

The Mooresville, North Carolina, company on Wednesday reported a 16.4 percent drop in earnings to $554 million, or 67 cents per share. Earnings, adjusted for non-recurring costs, came to 74 cents per share, which is still 14 cents short of Wall Street expectations.

Revenue fell 1.8 percent to $15.49 billion, which edged out expectations. Same-store sales, usually considered a measure of a retailer’s health, rose 3.7 percent for the U.S. home improvement business.

Last week, Home Depot Inc. reported a 5.6 percent surge in profit and rising revenue.

Both Lowe’s and Home Depot are heading into their busy spring seasons in a healthy housing market, though there is concern of a slowdown.

Mortgage rates have been creeping higher, hitting their highest level in four years during the most recent report a week ago. That, coupled with rising home prices, could hamper what has been a persistently strong housing market.

For the full year, Lowe’s reported profit of $4.09 per share, or $$4.39 per share excluding certain costs, on revenue of $68.62 billion. The company expects profit to range from $5.40 to $5.50 per share and revenue to rise 4 percent.

Lowe’s said Wednesday that it will become the only nationwide retailer to sell paints Sherwin-Williams.

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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on LOW at https://www.zacks.com/ap/LOW

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