An Old-Fashioned Brick-and-Mortar Earnings Beat for Lowe's

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The time-tested tale of the mean old fox not being able to blow down the three little piggies' brick-and-mortar house might be a decent analogy for Lowe's  (LOW) - Get Report most recent quarterly earnings.

The home-improvement retailer on Wednesday posted adjusted earnings of of 94 cents a share, vs. 80 cents in the fourth quarter of 2018, 3 cents ahead of FactSet's average analyst estimate of 91 cents a share.

Sales came in at $16 billion, above the $15.6 billion posted a year ago though below the $16.2 billion expected by analysts. Same-store sales - a key metric of retail activity - were 2.5% vs. 3.2% a year ago.

Lowe's Q4 Earnings graphic

The Home Depot  (HD) - Get Report rival attributed almost all of the improvement to two things: cost-cutting, including the closure of non-performing stores, and good old-fashioned brick-and-mortar sales – and less so on 'straw-and-mud' e-commerce.   

"Our sales growth was driven almost entirely by our brick and mortar stores, supported by our investments in technology, store environment and the 'Pro' business," CEO Marvin Ellison said in a statement, adding that the company has "a detailed road map" in place to modernize its e-commerce platform.

Whether the trend will continue depends on a lot of different factors outside of Lowe's' control, namely the progress of the housing market, the direction of interest rates and the weather – all of which could impact foot traffic through its doors going forward. 

Nonetheless, while mixed for the quarter, the results were generally seen as strong enough to withstand the big bad wolf's potentially coronavirus-carrying winds - something Lowe's, Home Depot and many other retailers are keeping a watchful eye on.

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