Mooresville, North Carolina-based Lowe’s reported net income for the second quarter of $1.4 billion, or $1.68 per share, compared to $1.2 billion, or $1.31 a share, one year ago. Excluding a $96 million gain from the sale of Lowe’s interest in its Australian joint venture, the retailer earned $1.57 a share.
Revenue increased 6.8 percent, to $19.5 billion.
Sales at Lowe’s stores open for more than 12 months rose 4.5 percent, topping the 4.3 percent expected by analysts on average, according to Thomson Reuters.
Looking ahead, Lowe’s has lowered its earnings outlook for the full year, now expecting to earn between $4.20 and $4.30 a share. Analysts surveyed by Thomson Reuters were calling for annual profit of $4.62 per share.
Lowe’s investments to boost sales will include “amplifying our consumer messaging and incremental customer-facing hours in our stores,” Niblock explained in a statement.
Lowe’s still expects revenue to increase roughly 5 percent by the end of 2017, with sales at its established stores rising 3.5 percent.
“They’re attempting to bolster service in their stores,” Oppenheimer & Co. analyst Brian Nagel told CNBC’s “Squawk Box” Wednesday morning. “This is one category in retail where service really matters.”
Earlier this month, retail rival Home Depot reported profit, revenue and comparable sales that topped analysts’ expectations. But shares fell that same day on continued fears that the home improvement company might not be “Amazon proof,” after all.
Nagel added that Wednesday’s weaker report from Lowe’s is “more of a Lowe’s issue than something bad in the environment.”
Lowe’s said on Wednesday that it plans to add 25 home improvement and hardware stores this year.
“Despite the addition of more services and brands for the pro-shopper and a good marketing effort, we still feel that Lowe’s is behind Home Depot when it comes to both visibility and success with this increasingly important group of customers,” GlobalData Retail’s Saunders said.
“We also have concerns around profit as Lowe’s will inevitably need to spend more on marketing, and perhaps invest more in price, if it is to win customers as it comes into the fall and winter seasons.”
In its fiscal first quarter, Lowe’s earnings and sales fell short of Wall Street estimates, especially when considering the momentum in the housing sector heading into the start of the year and the spring season.
As of Tuesday’s market close, shares of Lowe’s had fallen about 2 percent over the past 12 months. This compares to the S&P 500 Retail ETF (XRT‘s) losses of more than 15 percent over the same period.
In 2017, Lowe’s stock has managed to make up for some of its losses, climbing more than 6 percent since the start of the year.