(Reuters) – Lowe’s Cos Inc missed quarterly same-store sales estimates on Wednesday due to stiff competition from larger rival Home Depot Inc, and forecast annual earnings below expectations.
Shares of the Mooresville, North Carolina-based home improvement chain fell 3% to $115 in trading before the bell.
Home Depot, which beat sales estimates on Tuesday, has been focusing on widening market share by investing heavily on its website and app, looking to marry its online and brick-and-mortar businesses.
In contrast, Lowe’s Chief Executive Officer Marvin Ellison has largely focused on boosting profit margins by shutting underperforming stores, and cutting back on slow-moving inventory.
The company’s same-store sales rose 2.5% in the fourth quarter ended Jan. 31, below expectations of a 3.6% increase, according to IBES data from Refinitiv.
It said it expects adjusted fiscal 2020 earnings of $6.45 to $6.65 per share, compared with analysts’ average estimate of $6.67.
The company also forecast 2020 total sales growth of 2.5% to 3%, largely below estimates of a 2.9% increase.
Net earnings came in at $509 million in the fourth quarter, compared with a loss of $824 million, a year earlier, when the company wrote down the value of its Canadian operations.
Excluding items, the company earned 94 cents, beating estimates of 91 cents.
Reporting by Uday Sampath in Bengaluru; Editing by Shinjini Ganguli
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