Lowe’s Outperformed Home Depot’s Earnings Growth in 2Q17
Lowe’s EPS growth
With EPS (earnings per share) growth of 14.6%, Lowe’s (LOW) outperformed Home Depot in 2Q17. During the quarter, Lowe’s posted an adjusted EPS of $1.68—compared to $1.37 in 2Q16. The EPS growth was driven by revenue growth, share repurchases, and net margin expansion.
Interested in BBBY? Don't miss the next report.
Receive e-mail alerts for new research on BBBY
For the next four quarters, analysts expect Lowe’s to post EPS of $4.82, which represents growth of 11.1% year-over-year. The EPS growth is expected to be driven by revenue growth, net margin expansion, and share repurchases. We’ll discuss share repurchases more in the next part. After posting its 2Q17 earnings, Lowe’s management lowered its EPS guidance to $4.20–$4.30 from the earlier guidance of $4.30.
Home Depot’s EPS growth
Home Depot (HD) posted EPS of $2.25 in 2Q17—14.2% growth from $1.97 in 2Q16. The EPS growth was driven by revenue growth, net margin expansion, and share repurchases. Share repurchases reduce the number of shares outstanding and boost the company’s EPS.
For the next four quarters, analysts expect Home Depot to post EPS of $7.77—11.6% growth from $6.96 in the same four quarters the previous year. After strong 2Q17 earnings, the company’s management raised its 2017 EPS guidance from $7.15 to $7.29. The new guidance represents 13.0% growth from $6.45 in 2016.
In the next part, we’ll discuss Home Depot and Lowe’s dividend policies.