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2022-02-23 18:31

Lowe's Companies Inc closed flat on Wednesday even after the company reported solid financial earnings for the fourth quarter 2021 and provided upbeat outlook for the year 2022. Lowe's Companies is a FORTUNE 50 home improvement retailer in the United States and Canada that handles about 19 million consumer transactions per week.

Notable figures in Lowe’s earnings report
The company has generated net earnings of $1.2 billion for the fourth quarter of 2021 which is relative higher than $978 million in the fourth quarter of 2020. For the fourth quarter 2021 the diluted earnings per share were $1.78 compared to $1.32 during the same period in 2020. The fourth quarter’s diluted EPS has notably surged by 34% compared to adjusted diluted EPS of $1.33 in Q4 of 2020.

Overall sales for the fourth quarter were $21.3 billion this is an increase of 5.0 % from $20.3 billion in the fourth quarter of 2020. In the fourth quarter, comparable sales in the home improvement industry in the United States climbed by 5.1%. Sales to Pro customers climbed by 23%.

In the fourth quarter, the corporation gave front-line workers a $265 million discretionary year-end incentive in gratitude of their efforts throughout the outbreak in 2021.

In the earnings press release, the President and CEO Marvin R. Ellison stated:

"We delivered another year of outstanding performance in 2021, as we gained market share across DIY and Pro through our Total Home strategy. I would like to thank our front-line associates for their tremendous efforts this year. We remain confident in the long-term strength of the home improvement market, and our ability to expand operating margin."

Financial Outlook for full year 2022
The company has provided its financial estimate for the full year 2022 including the 53rd week as there were 22 weeks in the year 2021.The company is expecting net sales of $97 billion to $99 billion for the full year 2022 including its 53rd week. The 53rd week is anticipated to increase the total sales by $1.0 billion to $1.5 billion. The effective income tax rate will be around 25% while the interest expense is estimated to be in the range of $1.0 to $1.1 billion.

The Gross margin is also expected to move up compared to the previous year. The diluted earnings per share will be nearly of $13.10 to $13.60. And lastly the depreciation and amortization for the full year 2022 will be around $1.75 billion. Lowe’s is down more than 15% in the stock market on a year-to-date basis and has a market cap of $144.92 billion. The stock now trades at a PE multiple of 18.68.