Lowe's Stock: Price Plunge, Home Depot Rivalry, and What We Know

Lowe's Q3: Smoke and Mirrors or Solid Ground? Don't Believe the Hype.

Alright, let's get this straight. Lowe's is trying to tell us everything's sunshine and rainbows after their Q3 report? Gimme a break. Positive comp sales? Online growth? Double-digit growth in home services? Sounds like a corporate fever dream to me. And of course, they thank their associates for their "hard work and dedication." Translation: "Thanks for busting your asses while we rake in the profits."

Numbers Game

Okay, the numbers. Sales up to $20.8 billion. Cool. But diluted EPS down from last year. They conveniently gloss over that by touting their adjusted diluted EPS, which is up. Adjusted for what, exactly? Oh, just a measly $129 million in pre-tax expenses related to acquisitions. Right. So, if you ignore all the stuff that makes them look bad, they're doing great! It's like saying your diet is working as long as you don't count the cheat days.

And this "positive comps" thing? They're patting themselves on the back for a 0.4% increase. Point four percent! That's barely a blip. I've seen bigger jumps from finding spare change in my couch. The stock market is probably thrilled offcourse.

Oh, and speaking of acquisitions, they dropped $8.8 billion on FBM. Eight. Point. Eight. Billion. Dollars. On Foundation Building Materials. Is that supposed to impress me? It sounds like the kind of company you create in a SimCity game when you're bored. What's the long game here? Are they trying to become some kind of Home Depot/construction supply megazord?

Outlook Not So Sunny

Then comes the best part: they're "updating" their full-year outlook due to "ongoing uncertainty in the macroeconomic environment." Translation: "We have no freaking clue what's going to happen, so we're lowering expectations." They are still expecting total sales of $86 billion, but the comparable sales are expected to be flat. Flat! What happened to all that "positive comp sales" talk? Lowe’s beats on quarterly sales, but lowers full-year profit forecast amid economic uncertainty

Adjusted diluted earnings per share are now "approximately" $12.25. That "approximately" is doing a lot of heavy lifting. And net interest expense is going up to $1.4 billion. So they spend billions on acquisitions, then whine about interest expenses? Maybe don't buy so much crap you don't need.

The Cookie Crumbles

And then, I went to try and find out more about this FBM acquisition, and got hit with an "Access Denied" page. "We believe you are using automation tools to browse the website." Seriously? I was just trying to read an article! Are they accusing me of being a bot now? Maybe I am a bot. A bot who's sick of corporate BS.

But wait, let's get real for a second. Maybe I'm being too harsh. Maybe Lowe's is actually doing a decent job navigating a tough economy. Maybe Marvin R. Ellison is a secret genius. Maybe…nah. I can't even finish that sentence with a straight face.

So, What's the Real Story?

It's the same old song and dance. Spin the numbers, downplay the bad news, and hope everyone's too distracted to notice the emperor has no clothes. Lowe's isn't building anything but a house of cards.