Hurricanes provide a boost for Mooresville-based Lowe’s

Mooresville-based Lowe’s reported better-than-expected earnings Tuesday for the third quarter, a period when hurricanes Irma and Harvey battered parts of the coastal U.S. and drove up demand for emergency supplies.

Heavier store traffic and lower costs are also providing a tailwind for Lowe’s, which has been working to catch up to its Atlanta-based rival, Home Depot, the nation’s largest home improvement retailer.

In a call with the Observer Tuesday morning, CEO Robert Niblock said staffing efforts made to improve shoppers’ experience in stores has helped to boost in-store sales. Specifically, Lowe’s has increased the hours of some workers on weekends and peak traffic times during weekdays.

Lowe’s said that for the quarter, same-store sales, an industry term that gauges the health of a retailer and refers to stores open at least a year, surged 5.7 percent. Lowe’s said the rise was “above the company average,” but it was still slower than the 7.9 percent rise Home Depot reported last week.

“We’ve seen great improvement in our comps as we’ve progressed through the year,” Niblock said. “Now what we’re focused on is how we optimize those hours to best capitalize on traffic trends in the store.”

Lowe’s reported a profit of $872 million, up from $379 million a year prior, which included $462 million in non-cash pre-tax charges. Excluding certain items, earnings were $1.05 a share, above the consensus estimate of $1.02 a share from analysts surveyed by Zacks Investment Research.

Bolstered by above-average sales of items such as appliances and lumber, revenue for the quarter rose to $16.77 billion, up from $15.74 billion a year ago and above the Wall Street estimate of $16.57 billion.

Lowe’s said sales for hurricane-related purchases were approximately $200 million. Rebuilding efforts from the storms should push sales in the fourth quarter slightly higher, Lowe’s said.

In a statement, Niblock also said that the quarter’s results were bolstered by improved offerings for pro customers, such as contractors, who tend to spend more than the average do-it-yourself customer.

Last week, Lowe’s rival Home Depot similarly reported better-than-expected earnings and a surge in sales for the third quarter as spending rose on rebuilding materials following the hurricanes in Florida and Texas, as well as wildfires out West.

In a research note, RBC Capital Markets analyst Scot Ciccarelli said it was “a very solid quarter” for Lowe’s.

“While consistency in the results is still lacking, we believe the company’s solid top-line performance ... provides another positive datapoint for the home improvement sector, and Lowe’s seemed to hold share vs. Home Depot this quarter,” Ciccarelli said.

This story was originally published November 21, 2017 at 7:50 AM with the headline "Hurricanes provide a boost for Mooresville-based Lowe’s."