LIVE TV
ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • Home
  • Budget 2021
  • Personal Finance
    • PPF
    • Mutual Funds
    • Income tax
    • EPFO
    • Income Tax Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • Home Loan Calculator
    • SIP calculator
    • SWP Calculator
    • MF Returns Calculator
    • Lumpsum Calculator
  • India
    • Companies
    • Property
    • Startups
    • Uidai
  • Economy
    • Aviation
  • Tech
    • Mobiles
    • Apps
  • Auto
    • Cars
    • Bikes
  • Markets
    • Commodities
    • Currency
  • Jobs
  • Indian Railways
  • World
    • Economy
    • Politics
    • Markets
  • videos
  • photos
  • Authors
  • More ...
    • VIDEOS
    • PHOTOS
Read in App
Business News » World News

Lowe's struggles as investments hit margins

  • Twitter
  • Facebook
  • Linkedin
  • whatapp
  • View in App
Updated: Thu, Mar 01, 2018
12:34 am
Reuters
RELATED NEWS
Infosys Chairman Nandan Nilekani on India's Digital Economy I Kotak Institutional Equities highlights details Infosys Chairman Nandan Nilekani on India's Digital Economy I Kotak Institutional Equities highlights details
Digital economy to outpace GDP growth, will result in 'competitive advantage period' for leaders in digital space highlights ICICI Securities Digital economy to outpace GDP growth, will result in 'competitive advantage period' for leaders in digital space highlights ICICI Securities
#GSTMakeItEasy: Facing GST related issues? Big initiative by Zee Business - Tweet your problems now! Check all details here #GSTMakeItEasy: Facing GST related issues? Big initiative by Zee Business - Tweet your problems now! Check all details here
India’s economy picking up steam, estimate recovery at 10% in FY22: S&P Global India’s economy picking up steam, estimate recovery at 10% in FY22: S&P Global
RBI Monetary Policy: Governor Das says repo rate unchanged, sees GDP at 10.5 pct for FY22, inflation at 5.4 pct for Q4FY21 RBI Monetary Policy: Governor Das says repo rate unchanged, sees GDP at 10.5 pct for FY22, inflation at 5.4 pct for Q4FY21

Lowe`s Companies Inc`s quarterly profit and margins fell well short of Wall Street estimates on Wednesday as the No. 2 U.S. home improvement chain`s investments to convert shoppers` visits into sales did not pay off as much as expected.

The company`s shares tumbled 9 percent after Lowe`s forecast a drop in margins this year - due to heavy investment in a very competitive U.S. market.

A forecast that same-store sales growth would also slow this year suggested that investment would not bear fruit soon and left it trailing sector leader Home Depot.

"We made an investment in the third quarter to bolster conversion rates ... we need to make the incremental investments to ensure that we convert that traffic into transactions," Chief Executive Officer Robert Niblock said on a conference call.

Despite a rise in store traffic, the number of customers making purchases dropped, and the purchases included expensive items with lower profit margins, such as lumber and washing machines. For investors, the benefit of higher same store sales were undermined by lower profit margins.

"Big ticket sales continued to be a driver of much of the top-line gains, with appliances coming at a double-digit pace and tickets over $500 rising at 5.5 percent," Morningstar analyst Jamie Katz said.

"However, appliances tend to have lower gross margin than some other categories at the business, adding pressure to profitability."

The company`s gross margins fell to 33.73 percent, missing analysts estimates of 34.27 percent, according to Thomson Reuters I/B/E/S. The company attributed sales of lower-margin products as well as money spent on initiatives such as advertising and home deliveries for the drop.

Operating margins also dropped and Lowe`s said it expected a drop of about 30 basis points this year.

Same-store sales, however, rose 4.1 percent, topping market expectations. But that was well below the 7-percent growth posted by market-leader Home Depot Inc , which also reported higher customer transactions and average spend.

Lowe`s net sales fell nearly 2 percent to $15.49 billion, but topped estimates of $15.33 billion.

Net income fell 12.5 percent to $554 million. Its adjusted earnings of 74 cents per share were well below analysts` estimate of 87 cents.

The results from the home improvement chain, which also owns Canadian home goods retailer Rona, come at a time when rising mortgage rates and the impact of the U.S. tax reforms on higher-priced homes have begun to worry investors in construction-related businesses.

Lowe`s shares were down 6.3 percent at $89.81 in mid-day trading, easing from a session-low of $86.75. Both Lowe`s and Home Depot`s shares have risen about 28 percent in the past year.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)

Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.

TAGS:
Economy
RELATED NEWS
Infosys Chairman Nandan Nilekani on India's Digital Economy I Kotak Institutional Equities highlights details Infosys Chairman Nandan Nilekani on India's Digital Economy I Kotak Institutional Equities highlights details
Digital economy to outpace GDP growth, will result in 'competitive advantage period' for leaders in digital space highlights ICICI Securities Digital economy to outpace GDP growth, will result in 'competitive advantage period' for leaders in digital space highlights ICICI Securities
#GSTMakeItEasy: Facing GST related issues? Big initiative by Zee Business - Tweet your problems now! Check all details here #GSTMakeItEasy: Facing GST related issues? Big initiative by Zee Business - Tweet your problems now! Check all details here
India’s economy picking up steam, estimate recovery at 10% in FY22: S&P Global India’s economy picking up steam, estimate recovery at 10% in FY22: S&P Global
RBI Monetary Policy: Governor Das says repo rate unchanged, sees GDP at 10.5 pct for FY22, inflation at 5.4 pct for Q4FY21 RBI Monetary Policy: Governor Das says repo rate unchanged, sees GDP at 10.5 pct for FY22, inflation at 5.4 pct for Q4FY21

LATEST NEWS

ITC Share Price: Experts give 'share to buy' tag; predicts up to 25% profit in three months

Delhi to have its own school education board; Arvind Kejriwal says focus will be on providing jobs, proposes this unique exam pattern

India fix Lord's date: Kohli and Co thrash England, to meet New Zealand in WTC final

Stock Market Outlook: Anil Singhvi reveals Nifty, Bank Nifty support range, says investors should trade keeping volatility in mind

EaseMyTrip IPO Review: Issue opens on Monday! 'SUBSCRIBE' say experts; check details like important dates, price band, lot size, many more

3 free LPG cylinders likely again for Ujjawala scheme beneficiaries

EPF Passbook Balance Check Online: EPFO members can do this via Umang App, SMS, missed call; choose whatever you want

Covid 19 Phase 2: These government employees to be reimbursed 'medical expenses' for coronavirus vaccination

Solid Fuel Ducted Ramjet successful flight test : How it gives technological edge to DRDO and boosts its long range air-to-air missiles capabilities—EXPLAINED

DDA Housing Scheme 2021: Draw for allotment of flats on this DATE—Watch it live on AWAAS app

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • EPFO
  • Budget 2020
  • Income Tax Return
  • Auto Expo 2020
  • Home Loan
  • Business News

Trending Topics

  • Income Tax
  • income Tax Calculator
  • 7th Pay Commission
  • Reserve Bank of India
  • GST
  • Latest Business News

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
Copyright © Zee Media Corporation Ltd. All rights reserved