It was a cold winter for Lowe’s Cos., but sales largely held up. And now, CEO Marvin Ellison said demand for home improvement goods is starting to heat up, one day after rival Home Depot Inc. reported results that fell short.
Fourth-quarter revenue of $15.6 billion was largely in line with estimates. A same-store sales gain of 1.7% also was just short of projections — but Ellison said U.S. comparable sales surged 5.8% in January. That pace tops Home Depot’s 4.1% gain for the month.
Investors may be looking at the results as strong when taking into account bad weather, including a historic cold snap in parts of the United States. RBC Capital Markets analyst Scot Ciccarelli said in a note to clients that the results “were fairly solid given the weather-related headwinds facing the industry.”
The company reiterated its expectations for the current fiscal year, saying same-store sales would rise about 3%. That’s still short of Home Depot’s forecast for a 5% gain, but recent stock gains indicate that investors believe Ellison’s strategy is working.
The company had $1.6 billion in charges during the quarter, including expenses tied to Ellison’s decision to exit poor-performing businesses and close stores. There also was a $952 million goodwill impairment on its Canada division, stemming from the company’s 2016 acquisition of Rona Inc.