Business

Lowe’s backs 2021 slowdown forecast after riding home improvement boom

The home improvement chain and larger rival Home Depot Inc were among the biggest retail winners last year as Americans, who were forced to curtail their spending on travel and leisure activities, poured money into minor remodeling and repair works at their homes.

Lowe’s shares fell 3.3% as it stuck by its 2021 outlook of a $4 billion to $8 billion drop in revenue, depending on a robust or weak scenario for the broader home improvement market and despite seeing sales momentum in February.

Same-store sales for Lowe’s rose 28.1% in the fourth quarter ended Jan. 29, beating analysts’ estimates for a 21.2% increase, according to IBES data from Refinitiv. Larger rival Home Depot reported a 24.5% gain on Tuesday.

“Lowe’s capped off a terrific year with another strong quarter … beating high sales expectations, which were even higher after Home Depot’s robust results yesterday,” Telsey Advisory Group analysts wrote.

Lowe’s total net sales rose 26.7% to $20.31 billion in the fourth quarter, beating estimates of $19.48 billion. Full year sales rose 24.2% to nearly $90 billion.

Excluding items, the company earned $1.33 per share, beating estimates of $1.21.