US home improvement retail company Lowe's reported mixed-results for its fourth-quarter earnings on Wednesday. The North Carolina-based firm reported sales that were lower than Wall Street expectations, leading it to announce a disappointing revised forecast.
For its fourth-quarter ending on January 31, the company reported earnings of 94 cents per share, slightly higher than the 91 cents expected. Revenue for the quarter reached $16.03 billion, lower than the $16.15 billion expected by analysts. Same-store sales growth hit 2.5 percent, lower than the 3.6 percent expected by analysts.
The US retail company reported a net income of $509 million for the quarter, significantly better than the $824 million loss it reported over the same period a year earlier. The figure represents a big achievement for Lowe's CEO Marvin Ellison, who took over reins of the company in 2018. Under his leadership, the company has been attempting to revive its business through massive undertakings aimed at transforming its operations.
Ellison previously stated that the plan will include a renewed focus on expanding the company's e-commerce and to roll out new marketing efforts to attract more professional contractors and home builders. The executive also stated that the company will further capitalize on its known strengths, including bolstering its appliance segment through measures such as faster deliveries.
During its recent earnings calls, Ellison pointed out that the company is making great progress in its attempt to turnaround the business. However, the executive cautioned that there is still a lot of work to be done.
The company expects that the complete transformation of the business will take at least another year. On this note, the company stated that it expects sales growth to be somewhere around 2.5 to 3 percent in the coming quarter and 3 to 3.5 percent for its fiscal 2020. The company also revealed a more conservative earnings forecast for its fiscal 2020 with a range of between $6.45 and $6.65 per share. This is slightly lower than analysts' forecast of $6.34 to $6.92 per share.
Ellison admitted some of the shortcomings of the company, including its outdated online portal. He explained that having a limited online presence will definitely hurt its brick-and-mortar sales as people tend to do a lot of online research before they visit physical stores.
Lowe's is planning to overhaul its website, which it expects will result in a bump in online sales in the coming quarters. The company stated that expects to have high single-digit growth during the second half of the year once the website redesign is completed.
