Lowe's (LOW 79.65, -2.67) is down 3.2% in pre-market after missing earnings expectations.
The home improvement retailer reported below-consensus first quarter earnings of $1.03 per share on a 10.7% year-over-year increase in revenue to $16.86 billion, which was just shy of market estimates.
Comparable sales during the first quarter increased 1.9% while comparable sales in the company's U.S. business rose 2.0%. Lowe's CEO noted that comparable sales growth was above the company's average, taking place against a solid macroeconomic backdrop.
Gross margin declined to 34.40% from 35.04% one year ago while operating margin fell to 9.25% from 10.42%.
Today's report from Lowe's comes one week after Home Depot (HD 154.14, -0.69) reported better than expected earnings for the first quarter. Like Lowe's, Home Depot enjoyed a positive customer spending environment, something that cannot be said by most other retailers.
Both Lowe's and Home Depot hit all-time record highs earlier this month. Home Depot is up 15.5% for the year while Lowe's has climbed 12.0% since the end of 2016.
Lowe's reaffirmed its operating outlook for the fiscal year, expecting earnings of about $4.30 per share. This reflects the loss on extinguishment of debt and implies revenue growth of about 5.0% and comparable sales growth of roughly 3.5%. The retailer's expansion plans call for 35 new home improvement and hardware stores by the end of the fiscal year. Operating margin is expected to grow 120 basis points.