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Lowe’s Companies today reported a better-than-expected rise in fourth quarter sales, which the company suggested is due to an improving housing market and warmer winter weather.
The announcement comes the day after Home Depot also announced better-than-expected sales. While Lowe’s still trails behind its bigger rival Home Depot, both home improvement chains are “benefiting from a pent-up demand for houses after the 2008 financial recession, while low interest rates and growth in jobs, wage and credit have spurred spending on renovations,” according to Fortune.
Lowe’s says it reached net earnings of $11 million for the quarter, which ended Jan. 29. This includes a non-cash impairment charge of $530 million due to the decision to exit its joint venture in Australia.
While the company departs Australia, earlier this month, Lowe’s announced it would buy home-improvement chain RONA in a deal valued at CA$3.2 billion ($2.28 billion) to enter Canada’s Quebec province, a venture that the company says will increase revenue and operating profitability in Canada.
Sales for the fourth quarter increased 5.6 percent to $13.2 billion from $12.5 billion in the fourth quarter of 2014. Comparable store sales increased 5.2 percent. For the fiscal year, sales were up $59.1 billion, a 5.1-percent increase over the same period a year ago, and comparable store sales increased 4.8 percent.
“I am pleased that we delivered another solid quarter, driving increased traffic through competitive offers and creating strong value for customers,” Robert A. Niblock, Lowe’s chairman, president and CEO, says. “We capitalized on increased demand for exterior products as a result of warmer weather, while at the same time helped customers tackle interior projects, allowing us to deliver positive comps in all product categories.”
The company also provided its outlook for the fiscal 2016 period, with total sales expected to rise about 6 percent and an additional 45 locations slated to be built.
“In 2016, we will continue to leverage the favorable macroeconomic backdrop for home improvement, providing customers with complete solutions for their home improvement projects,” Niblock says.
At the end of the fourth quarter, Lowe’s operated 1,857 home improvement and hardware stores in the U.S., Canada and Mexico.
