How Lowe’s Is Dealing With The ‘Tough Macro Backdrop’

(CTN News) – In the fourth quarter, Lowe’s (LOW) reported revenues of $18.60 billion, exceeding expectations, versus an expected $18.45 billion, leading to higher share prices for the company after its earnings report.

However, the company has seen its comparable sales decline 6.2% year-over-year in the quarter, with the company citing a decline in consumer home renovation projects as the reason for the decline.

Michael Baker, D.A. Davidson’s Senior Research Analyst, makes an appearance on Yahoo Finance to talk about the company’s earnings as well as the decline in interest in home renovations in general.

Despite the headwinds, Baker explains what Lowe’s is doing well in spite of the challenges: “It was a good quarter for us. As far as the outlook for next year is concerned, we knew they would be guided to a lower number than what they did this year.”.

The outcome was not too bad at all, it was a little softer than expected, but it wasn’t too bad either.Despite the fact that they are facing tough macroeconomic conditions, we believe that they are doing well internally.

The company’s expenses were flat year-over-year when compared to sales, despite a huge drop in sales despite the fact that their expenses were flat on a year-over-year basis.It appears that they are controlling what they can well, as their gross margins are slightly higher.

I think that’s a good start against a tough environment like this one. In my opinion, that’s the reason why the stock opened a little bit lower than expected, but it’s now back up again. As far as we can see, the company is pretty well in control of what they can.”

Lowe Transcript of video

BRAND SMITH: We’re also keeping an eye on Lowe’s shares this morning as well. There is a lot of movement going on. They are up about 2.7% right now after its quarterly results were released. In terms of earnings, they beat both the top and bottom lines. There was a miss in the Street’s expectation of annual profit and sales, which caused shares to fall.

It is anticipated that shoppers will take a more cautious approach to spending on those DIY projects in the face of a sticky inflationary backdrop. We will be joined by Michael Baker, DA Davidson’s managing director and senior research analyst, so we can take a deeper look at the company’s latest results.

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