Lowe’s (NYSE:LOW) shares fell Wednesday after the home improvement retailer reported third-quarter earnings and a profit outlook slightly short of estimates, weighed down by higher labor costs and investments in its e-commerce business.
Its same-store sales surged more than 30%, including a doubling of online sales, as the coronavirus pandemic pushed more people to its stores and website to invest in their homes.
But investors largely shrugged off those gains, looking more toward the future and how the retailer will perform after the Covid-19 crisis abates.
For the quarter ended Oct. 30, Lowe’s net income fell to $692 million, or 91 cents a share, from $1.05 billion, or $1.36 per share, a year earlier. Excluding a $1.1 billion pretax loss on extinguishment of debt, the company earned $1.98 per share, a penny short of analysts’ estimates.
Sales rose to $22.31 billion from $17.39 billion a year earlier, beating expectations for $21.25 billion.
Same-store sales, which track sales online and at Lowe’s stores open for at least 12 months, surged 30.1%, topping estimates for 22.8% growth.
Lowe’s said it expects to earn between $1.10 and $1.20 per share during its fiscal fourth quarter, while analysts had been calling for earnings of $1.17 a share. It forecasts same-store sales to grow about 15% to 20%.
Lowe’s said it has spent more than $1.1 billion on Covid-related expenses year to date.
LOW shares opened Wednesday down $6.98, or 4.4%, to $152.80.
