Thomson Reuters
- Bill Ackman's Pershing Square Capital has reportedly amassed a $1 billion stake in Lowe's.
- News of the investment comes one day after Lowe's tapped Home Depot veteran Marvin Ellison to lead the chain.
- Lowe's reported first quarter earnings on Wednesday that missed Wall Street expectations for profit, revenue, and comparable sales.
- Follow Lowe's stock price in real-time here.
Add billionaire investor Bill Ackman to those who welcome the hiring of Lowe's new CEO.
Ackman has amassed a roughly $1 billion stake in the company through his hedge fund Pershing Square Capital, the Wall Street Journal reported Wednesday afternoon, citing sources at a conference in New York.
On Tuesday, Lowe's said it had hired Marvin Ellison, former JCPenney CEO and 12-year Home Depot veteran, as its new chief executive.
His return to the home-improvement space comes amid increased activist investor interest in Lowe's. Fellow activist investor D.E. Shaw took up a stake in the company during the first quarter, and was instrumental in the executive shakeup, the paper reported. Together, the two activists are hopeful that Ellison can improve Lowe's e-commerce and professional businesses as he did at Home Depot during his 12-year tenure.
That announcement of Ellison's hiring came just one day ahead of the company's first-quarter earnings report. On Wednesday, the home-improvement retailer said it earned $1.19 per share, missing the $1.22 that analysts polled by Bloomberg were expecting.
Its revenue of $17.36 billion also fell slightly short of the expected $17.48 billion. Comparable sales came in at 0.6%, much lower than the expected 2.2%.
"We experienced a delayed spring selling season due to prolonged unfavorable weather across geographies that impacted outdoor categories,” which drove down comparative sales in lawn and garden, seasonal, and outdoor living categories, outgoing chief executive Robert Niblock told analysts on the conference call Wednesday morning,
Luckily, "spring has finally arrived," Niblock quipped, saying same-store sales in May are already in double-digits. Lowe's reiterated its full-year guidance, and says it expects to make up the lost revenue from this quarter in the next six months. Shares of Lowe’s rose more than 9% in trading Wednesday following the news.
The home-improvement retailer is up 2.5% this year.
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