Lowe's Offers an IOU
You got that? You should because it's pretty basic, even though too much of the media let it slip their minds.
Lowe's had a terrible second-quarter. Whatever should have been up was down and what should have been down was up. Worse still, they cut their full-year forecasts to $1.64 a share, from a range that stretched as high as $1.83. And? Their reduced performance goal is contingent upon achieving that certain level of buybacks.
It always requires a leap of faith to trust that a company will buy the load of shares they say they will. Actually, forget leap of faith. It's often tantamount to a leap off a bridge.
Companies frequently don't buy back quite as much as promised. Sometimes, they're trying to trick you; other times, they lose confidence in their stock or cash is simply needed elsewhere.
So how did the media do in alerting you to the fact that, amid all their troubles, Lowe's is relying on a promised level of buybacks, a shaky premise indeed?