LONDON (ShareCast) - (Sharecast News) - Lowe's Companies delivered better-than-expected second-quarter earnings on Wednesday and announced an $8.8bn deal to acquire Foundation Building Materials (FBM), stepping up its push into the professional construction market and outpacing rival Home Depot's recent acquisition move.
For the quarter ended 1 August, the home improvement retailer posted net earnings of $2.4bn, or $4.27 per diluted share, compared with $4.17 a year earlier.

Adjusted earnings per share rose 5.6% to $4.33, beating Wall Street's $4.24 consensus.

Revenue grew 1.6% to $24bn, with comparable sales up 1.1%, supported by both professional and do-it-yourself demand.

"This quarter, the company delivered positive comp sales driven by solid performance in both pro and DIY," said chairman and chief executive Marvin Ellison, highlighting "another increase in customer satisfaction scores."

The stronger results came a day after Home Depot missed profit forecasts, sharpening investor focus on Lowe's strategy.

Shares of Lowe's climbed in premarket trading following the update.

Lowe's also unveiled a transformative acquisition, agreeing to buy FBM, a leading distributor of drywall, metal framing, and insulation with more than 370 North American locations and roughly 40,000 professional customers.

FBM generated $6.5bn in revenue last year and would add scale to Lowe's 'Total Home' strategy.

Ellison said the deal "allows us to serve the large pro planned spend within a $250bn total addressable market, and aligns perfectly with our Total Home strategy."

The company said it expected the transaction, financed with debt, to be accretive to adjusted earnings in its first full year.

It followed Lowe's $1.3bn purchase of Artisan Design Group in June, further cementing its expansion into the pro segment as competition with Home Depot intensifies.

Analysts described the move as a significant escalation in the distribution arms race between the two retailers.

Looking ahead, Lowe's raised its full-year sales forecast to between $84.5bn and $85.5bn, up from $83.5bn to $84.5bn previously.

It maintained expectations for flat to modestly higher comparable sales and guided for adjusted earnings of $12.20 to $12.45 per share.

At 0841 EDT (1341 BST), shares in Lowe's Companies were up 2.92% in premarket trading in New York, at $263.99.

Reporting by Josh White for Sharecast.com.

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