Lowe's Posts Profit Growth, Unveils $5 Billion in Buybacks

Lowe's Cos. said its fiscal fourth-quarter profit grew 6.3% as the home-improvement retailer's sales continued to grow.

The results came in just under Wall Street expectations, however.

The company also authorized an additional $5 billion in share buybacks. The company will continue to use the $1.3 billion balance on its existing authorization, Lowe's said, adding that it bought back $958 million in shares during the fourth quarter.

For the new fiscal year, Lowe's said it expects per-share earnings of $2.60, below the $2.64 recently projected by analysts polled recently by Thomson Reuters. The company said it expects total sales to increase 5% for the year, in line with analysts" views. Additionally, Lowe's said it expects same-store sales for the year to rise 4%.

Lowe's and rival Home Depot Inc. have enjoyed the fruits of a housing recovery while retailers in general have struggled with overall sluggishness in consumer spending. Yet, Home Depot plans to keep its seasonal hiring level for spring, its busiest sales season, flat at 80,000, while Lowe's said last week it would hire 25,000 seasonal workers, down from the previous-year total of 45,000.

Home Depot on Tuesday posted same-store sales growth of 4.4% in its fiscal fourth quarter, while saying it expects same-store sales growth of 4.6% for the fiscal year.

Lowe's on Wednesday said it posted 3.9% same-store sales growth in the period.

"During the quarter, we delivered solid performance in core home improvement categories, balancing softer sales of seasonal gifts and holiday decorations," Chairman and Chief Executive Robert A. Niblock said. "When extreme winter weather arrived late in the quarter, our distribution network responded quickly and efficiently to move product where it was most needed."

For the quarter ended Jan. 31, Lowe's posted a profit of $306 million, or 29 cents a share, up from $288 million, or 26 cents a share, a year ago. The results for the most recent quarter included a charge of two cents a share related to asset impairments.

Net sales improved 5.6% to $11.66 billion.

Analysts polled by Thomson Reuters had predicted per-share earnings of 31 cents on revenue of $11.67 billion.

Gross margin improved to 34.7% from 34.3%.

Shares of Lowe's were inactive. The stock is down 2.9% so far this year.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires