MOORESVILLE, N.C. (AP) — Home improvement retailer Lowe’s Cos. said Monday that cleanup efforts after Superstorm Sandy and its new pricing strategy helped its fourth-quarter net income surpass expectations.
Its net income fell 11 percent from last year’s quarter, which included an extra week of revenue. Its earnings forecast for the year was below expectations but its revenue projection beat the current consensus.
Its shares rose 83 cents, or 2.2 percent, to $38.50 in premarket trading.
Lowe’s has revamped its pricing structure, offering what it says are permanent low prices on many items across the store instead of fleeting discounts. In addition, the housing market has been slowly improving, with home sales and prices rising. Home improvement retailers such as Lowe’s are benefiting as people start spending more on their homes.
Lowe’s net income totaled $288 million, or 26 cents per share, for the three months ended Feb. 1. That’s down from $322 million, or 26 cents per share, a year ago. Analysts expected 23 cents per share, according to FactSet.
There were 11 percent fewer shares outstanding in the latest quarter than a year ago. That increases the value of each share. An extra week in the quarter last year had boosted year-ago earnings by 5 cents per share.
Revenue fell 5 percent to $11.05 billion from $11.63 billion. Analysts expected $10.85 billion. Revenue in stores open at least one year rose 1.9 percent. The measure is a key gauge of a retailer’s fiscal health because it excludes stores that open or close during the year.
Morningstar analyst Peter Wahlstrom said the quarter was generally good and in line with his expectations, helped by better gross margins — the amount of each dollar in revenue a company actually keeps — and a lower share count.
For the fiscal year, net income rose 7 percent to $1.96 billion, or $1.69 per share, from $1.84 billion, or $1.43 per share.
Revenue edged up less than 1 percent to $50.52 billion from $50.21 billion last year.
Lowe’s, which operates 1,754 stores in the U.S., Canada and Mexico, expects fiscal 2013 net income of $2.05 per share. Analysts expect $2.10 per share.
It expects revenue to rise 4 percent, implying revenue of $52.54 billion. Analysts expect $51.69 billion.
Lowe’s larger rival Home Depot reports fourth quarter results on Tuesday.