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Lowe's (NYSE:LOW) shares plummeted Wednesday after the company posted mixed fiscal first-quarter results and cut its forecast for the year, as higher costs weighed on results.
Earnings per share registered at $1.22 adjusted, vs. $1.33 estimated. Revenue came in at $17.74 billion, vs. $17.66 billion estimated. Same store sales were up 3.5%, vs. up 3.2% estimated.
Said CEO Marvin Ellison, "Our first-quarter comparable sales performance is a clear indication that the consumer is healthy and our focus on retail fundamentals is gaining traction.
"However, the unanticipated impact of the convergence of cost pressure, significant transition in our merchandising organization, and ineffective legacy pricing tools and processes led to gross margin contraction in the quarter which impacted earnings."
Lowe's said net income rose to $1.05 billion, or $1.31 per share, from $988 million, or $1.19 a share, a year ago.
For fiscal 2019, the company estimates total sales will rise 2%, while same-store sales are expected to increase 3%.
Lowe's expects net income for fiscal 2019 will be in the range of $5.54 to $5.74 per share. On an adjusted basis, it will earn between $5.45 and $5.65 per share.
The home improvement retailer announced Monday it was acquiring the retail analytics platform from Boomerang Commerce with hopes that infusing technology into its core retail business will help bolster data-driven pricing and merchandising.
Shares swooned $10.00, or 9%, to $101.10