Lowe's (LOW) Readies for Q2 Earnings: What's in the Cards?

Lowe's Companies, Inc. LOW is likely to register an increase in the top and the bottom lines when it reports second-quarter fiscal 2022 earnings on Aug 17, before the opening bell. The Zacks Consensus Estimate for quarterly revenues is pegged at $28,220 million, which indicates a rise of 2.4% from the year-earlier quarter’s reported figure.

The Zacks Consensus Estimate for fiscal second-quarter earnings has dipped 0.9% in the past 30 days to $4.63 a share. This suggests nearly 8.9% growth from the year-ago quarter’s tally.

We expect revenues to be up 3% year over year to $28,387.3 million and earnings to increase 10% to $4.67 per share.

In the last reported quarter, LOW delivered an earnings surprise of 8.3%. We note that the home-improvement retailer has a trailing four-quarter earnings surprise of 8.9%, on average.

Key Factors to Note

Lowe's has been focused on enhancing the omni-channel retailing capabilities in store operations, website and supply chain to resonate well with the customers’ demand. In addition, pro business has been significantly contributing to Lowe's performance. Management is quite focused on enhancing the Pro offerings across LOW’s stores and online with improved service levels, deeper inventory quantities, intuitive store layout and the addition of Pro-focused brands.

Meanwhile, LOW has been benefiting from the solid execution of its Total Home strategy, which focuses on boosting productivity and enriching the integrated omni-channel shopping experience. Also, a strong digital base has been aiding its performance for a while now. All these strengths have most likely driven the company’s performance in the quarter to be reported. The consensus estimate for comparable-store sales indicates growth of 2.4% year over year during the quarter under review. LOW’s comparable-store sales dipped 1.6% in the year-earlier quarter.

On the flip side, higher expenses associated with the pandemic and the ongoing supply-chain disruptions might have been concerns.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Lowe's this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Lowe's Companies, Inc. Price and EPS Surprise

Lowe's Companies, Inc. Price and EPS Surprise

Lowe's Companies, Inc. price-eps-surprise | Lowe's Companies, Inc. Quote

Lowe's has an an Earnings ESP of -1.71% and a Zacks Rank #3.

Stocks With the Favorable Combination

Here are three companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Ulta Beauty ULTA currently has an Earnings ESP of +3.27% and a Zacks Rank #2. The company is likely to register bottom-line improvement when it reports second-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $4.84 suggests an improvement of 6.1% from the year-ago quarter.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Ulta Beauty's top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues stands at $2.20 billion, which indicates an improvement of 11.7% from the figure reported in the prior-year quarter. ULTA has a trailing four-quarter earnings surprise of 49.8%, on average.

Home Depot HD currently has an Earnings ESP of +0.50% and a Zacks Rank #3. HD is likely to register top-line growth when it reports second-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for its quarterly revenues is pegged at $43.4 billion, which suggests growth of 5.4% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Home Depot’s quarterly earnings has increased a penny in the past 30 days to $4.95 per share, suggesting growth of 9.3% from the year-ago quarter's reported number. HD has a trailing four-quarter earnings surprise of 7.2%, on average.

Tapestry TPR currently has an Earnings ESP of +3.62% and a Zacks Rank #3. TPR is anticipated to register top and bottom-line growth when it reports fourth-quarter fiscal 2022 results. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.64 billion, indicating an improvement of 1.8% from the prior-year quarter’s reported number.

The Zacks Consensus Estimate for Tapestry’s bottom line has been unchanged in the past 30 days at 78 cents per share. The consensus estimate suggests growth of 5.4% from the year-ago quarter's reported figure. TPR has a trailing four-quarter earnings surprise of 17.6%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Lowe's Companies, Inc. (LOW) : Free Stock Analysis Report
 
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