Nov. 17 (Reuters) – Lowe’s Cos Inc (LOW.N) raised its full-year sales forecast on Wednesday as move to speed up product shipments helps home improvement chain overcome grunts supply and capitalize on an early start to holiday shopping by consumers.
The company’s third-quarter profits also exceeded market expectations, benefiting from increased demand for tools and building materials from Americans investing in their properties during a pandemic housing boom. Its shares rose 2%.
Consumers are buying vacation and winter products like snowblowers earlier than in previous years, Lowe’s said, echoing comments from big box retailer Target Corp (TGT.N). Read more
“With a wider awareness of the potential disruptions to the global supply chain, we are seeing many consumers looking to purchase products as soon as they are available in our stores,” said William Boltz, vice president of merchandising of the company, to analysts during a call.
Despite the costs of introducing vacation products to its stores and warehouses earlier than initially expected, Lowe’s gross margins fell from 32.7% to 33.1% in the quarter.
The higher margins, fueled by the focus on selling big-ticket items and lower spending, contrast with figures from Walmart Inc (WMT.N) and Target which fell under the high costs of the chain. ‘supply.
“With the market more focused than ever on short-term gross margin trends due to supply chain issues, (Lowe’s) has beaten hands down on that line,” said Michael Baker, analyst at DA Davidson. .
Lowe’s made a profit of $ 2.73 per share, beating estimates of $ 2.36 per share, according to data from Refinitiv.
The company said it expected revenue of around $ 95 billion in 2021, up from a previous forecast of around $ 92 billion.
Uday Sampath report in Bangalore; Editing by Maju Samuel and Aditya Soni
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