Net sales for the first quarter of 2016 rose 7.8% to $15.23 billion, topping expectations of $14.87 billion. Lowe’s net income rose 31.4% to $884 million, and the earnings per share in the first quarter was 98 cents per share. Adjusted earnings per share was 87 cents, surpassing estimates of 85 cents per share.
Same-store sales, which is sales at stores open more than a year increased 7.3%, far surpassing the expectations of 4.3% growth. It is the first time that Lowe’s closed
the gap with its competitor Home Depot in same-store sales.
Lowe’s said in February that it would acquire Rona in Canada, and pay C$24 per share for shares of Rona, as part of the $2.28 billion deal. The acquisition would increase 700 Canadian stores to Lowe’s locations. The reported earnings per share of 98 cents in the first quarter of fiscal 2016 included an unrealized gain of $160 billion and earnings per share of $0.11 due to the hedge on foreign currency in the acquisition of Rona.
Lowe’s raised its fiscal 2016 guidance and now expects the sales would rise 6% and same-store sales would increase 4%. The company also forecasted the full-year profit to be $4.11 per share from about $4.00 per share.
"We executed well in the quarter, growing both transaction and average ticket to achieve comparable sales growth that exceeded our expectations. We continued to focus on providing better omni-channel customer experiences, and saw strength in indoor as well as outdoor categories.” Lowe's chairman, president and CEO, Robert Niblock said. "Our team's project expertise and commitment to customer service allowed us to capitalize on strong home improvement demand during the quarter, and I would like to thank them for their efforts."
Lowe’s share was up 3.83% to $78.98 per share in mid-day trading.