Ackman’s hedge fund discloses $1 billion stake in Lowe’s Companies Inc

Ackman’s hedge fund discloses $1 billion stake in Lowe’s Companies Inc


Lowe’s Companies Inc. (LOW) shares jumped more than 10 percent on Wednesday following the news that billionaire investor William Ackman’s hedge fund acquired about $1 billion stake in the Mooresville, North Carolina-based home improvement retailer.

The news came hours after Lowe’s announced slightly lower-than-expected Q1 results. A couple of days ago, the company also revealed a major change in top management, saying J.C. Penney’s CEO Marvin Ellison will take place of current Chief Executive Robert Niblock, who will retire in July.

The investment is the third largest by Ackman this year. His stock bets usually have a positive impact on the stock price of companies he invests in, as he usually presses for boardroom changes.

Ackman’s Pershing Square Capital Management disclosed an investment in Nike Inc in January and later exited after making a profit of $100 million. He also got rid of his long-term investment in Herbalife. His firm also made new investments in United Technologies corp.

Separately, Lowe’s announced its financial results for the first quarter. The company’s same-store sales fell short of expectations, mainly due to prolonged winter season that hurt demand for its outdoor goods.

Speaking to analysts during a conference call, Chief Financial Officer Marshall Croom said Lowe’s expects to recover most of the sales it lost during the first quarter.

Overall, the company reported net income of $988 million for the first quarter that just missed analysts’ average estimates of $1 billion. Revenue for the quarter came in at $17.4 billion, below consensus forecast of $17.5 billion.

Looking forward, Lowe’s is expecting profit in a range of $5.40 per share to $5.50 per share for the full year.

Lowe’s shares rose 10.43 percent to $94.69 on Wednesday.