The top line for Lowe’s Companies, Inc. (NYSE:LOW) lagged behind the Zacks Consensus Estimate for the second quarter of fiscal 2022, while the bottom line exceeded it. In addition, a more considerable operating margin contributed to greater profits compared to the same period in the prior fiscal year. For the thirteenth consecutive fiscal quarter, LOW recorded results above expectations.
Lowe’s Companies, Inc. (NYSE:LOW) Shares have increased by 17.4 percent over the previous three months, outperforming the industry’s 15.1% increase.
Lowe’s Quarterly Breakdown
With an EPS of $4.67, the company outperformed the Zacks Consensus Estimate of $4.63 and showed a 9.9% increase from the EPS of $4.25 seen in the second quarter of fiscal 2021.
Lowe’s Companies, Inc. (NYSE:LOW) net revenue of $27,476 million was down 0.3% year-over-year and lower than the consensus estimate of $28,195 million from Zacks. During the period under consideration, comparable sales fell 0.3%. Retailers in the home improvement industry in the United States saw a 0.2% increase in comparable sales during the period under review. Sales increased by 13% to commercial customers, marking the eleventh consecutive quarter of double-digit growth.
The gross margin decreased by 54 basis points (bps) to 33.24%, while the gross profit fell 1.9% to $9,133 million. There was an increase of 0.5% over the previous year to $4,229 million in operating income. Gains from the Total Home approach and the implementation of the Perpetual Productivity Improvement effort led to an increase in an operating margin of 12 basis points, to 15.39 percent.
Financial Aspects & Updates
After the quarter, Lowe’s Companies, Inc. (NYSE:LOW) had a cash and equivalents balance of $1,482 million, long-term debt of $28,763 million (excluding current maturities), and a deficit of $8,442 million for shareholders.
The six-month period ending July 29, 2022, saw $6,012,000,000 in cash flow from operations for Lowe’s. The total capital outlay was $687 million. The company projects capital expenditures of almost $2 billion for 2022.
Lowe’s Companies, Inc. (NYSE:LOW) paid $4 billion to repurchase 21.6 million shares and distributed $524 million in dividends during the period under review. During the upcoming fiscal year of 2022, LOW plans to repurchase about $12 billion in stock.
As of July 29, 2022, Lowe’s had 1,969 locations in the United States and Canada selling building materials and hardware. Nearly 212 dealer-owned stores were serviced by LOW.
Outlook
The administration has restated its fiscal 2022 forecast. Lowe’s Companies, Inc. (NYSE:LOW) anticipates sales between $97 and $99 billion (including the 53rd week). In all likelihood, revenues will rise by between $1 and $1.5 billion, thanks to the 53rd week. Sales for the fiscal year 2021 at Lowe’s were $96.3 billion.
In fiscal 2022, we expect comparable sales to fall from 1% to 1%. Despite recent market volatility, Lowe’s Companies, Inc. (NYSE:LOW) remains confident that its gross margin rate will rise modestly over the prior fiscal year. The operating margin is predicted to be between 12.8% and 13.0%. As projected by management, financial results for the current fiscal year are expected to be in the range of $13.10 to $13.60 per share.
This means that management expects operating income and EPS to achieve the upper end of their projected ranges while comparable sales will match the lower end of the recommended range. The DIY market is improving, and Lowe’s Companies, Inc. (NYSE:LOW) anticipates their Pro business to remain strong.
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Author Shariq Khan 
