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Investing.com - Lowe’s (NYSE:LOW) has reported unexpected growth in fourth-quarter comparable sales, as the home improvement chain said it was boosted by its strategy to increase market share by selling to both retail and professional customers.
CEO Marvin Ellison said in a statement that this tactic, which aims to help Lowe’s compete with larger rival Home Depot (NYSE:HD), is continuing to "gain traction."
Quarterly comparable sales inched up by 0.2% against a year ago, surprising expectations that the figure would contract by 1.82%, according to Bloomberg consensus estimates. Analysts at Jefferies said the number pointed to "strong outperformance" against Wall Street expectations.
Net sales of $18.55 billion and adjusted per-share income of $1.99 in the fourth quarter topped projections as well.
Shares in North Carolina-based Lowe’s rose in early U.S. trading on Wednesday.
Like Home Depot, Lowe’s has been seeing some relief from a series of Federal Reserve interest rate cuts last year, which have relieved some pressure on borrowing costs faced by homeowners considering renovating their properties prior to putting them up for sale.
Ellison said Lowe’s is upbeat about the "long-term strength of the home improvement industry," adding that the company is confident it can capitalize on a recovery in housing demand, which has been recently tempered in part by higher mortgage rates.
Still, Lowe’s warned that it faces "near-term uncertainty" in the home improvement market.
For its 2025 fiscal year, Lowe’s expects overall sales to be between $83.5 billion to $84.5 billion, compared with estimates of $84.63 billion.
Comparable sales are tipped to be flat to up 1% versus the year-ago period. Analysts had called for growth of 1.4%.
Meanwhile, annual diluted earnings per share are seen at $12.15 to $12.40, below Wall Street consensus forecasts of $12.50.