Lowe’s lifts sales outlook as holiday shopping boost arrives early

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FILE PHOTO: Shoppers load a box of merchandise into a truck after visiting a Lowe’s hardware store in Philadelphia, Pennsylvania November 4, 2020. Businesshala/Mark Makela/File photo
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(Businesshala) – Lowe’s Cos Inc. raised its full-year sales forecast on Wednesday as a decision to accelerate product shipments, prompting the home improvement chain to offset a broad supply snarl and the start of a shopping holiday by consumers Capitalization helps.

The company’s third-quarter earnings also beat market expectations, riding on increased demand for equipment and building materials from Americans investing in their properties during a pandemic housing boom. Its shares rose 2%.

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Consumers are buying more holiday and winter products like snow blowers than in previous years, Lowe said, echoing comments made by big-box retailer Target Corp.

“With widespread awareness of potential global supply chain disruptions, we are seeing many consumers want to purchase products as soon as they are available in our stores,” William Boltz, the company’s vice president of merchandising, told analysts on a call.

Despite the cost of getting holiday products into its stores and warehouses earlier than originally planned, Lowe’s gross margin rose to 33.1% in the quarter from 32.7%.

Thicker margins due to a focus on sales and lower spending for big-ticket items contrasted with figures from Walmart Inc. and Target, which reeled under higher supply chain costs.

“The market is more focused on near-term gross margin trends than ever before because of supply chain issues, (Low’s) easily beat on that line,” said DA Davidson analyst Michael Baker.

According to Refinitiv data, Lowe’s posted a profit of $2.73 per share, beating estimates of $2.36 per share.

The company said it expects sales of about $95 billion in 2021, compared to a previous forecast of about $92 billion.

Reporting by Uday Sampath in Bengaluru; Editing by Maju Samuel and Aditya Soni

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