NEW YORK — Lowe’s recorded falling profits in the fourth quarter despite a red-hot housing market.
Shares fell 8 percent before the opening bell as healthy same-store sales were overshadowed by the profit miss and lower overall revenue.
The Mooresville, North Carolina, company on Wednesday reported a 16.4 percent drop in earnings to $554 million, or 67 cents per share. Earnings, adjusted for non-recurring costs, came to 74 cents per share, which is still 14 cents short of Wall Street expectations.
Revenue fell 1.8 percent to $15.49 billion, which edged out expectations. Same-store sales, usually considered a measure of a retailer’s health, rose 3.7 percent for the U.S. home improvement business.
Last week, Home Depot Inc. reported a 5.6 percent surge in profit and rising revenue.
Both Lowe’s and Home Depot are heading into their busy spring seasons in a healthy housing market, though there is concern of a slowdown.
Mortgage rates have been creeping higher, hitting their highest level in four years during the most recent report a week ago. That, coupled with rising home prices, could hamper what has been a persistently strong housing market.
For the full year, Lowe’s reported profit of $4.09 per share, or $4.39 per share excluding certain costs, on revenue of $68.62 billion.
Looking ahead, the company expects its fiscal 2018 profit to range from $5.40 to $5.50 per share and revenue to rise 4 percent. Same-store sales are forecast to increase 3.5 percent.
Lowe’s Cos. said Wednesday that it will become the only nationwide retailer to sell paints Sherwin-Williams.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on LOW at https://www.zacks.com/ap/LOW