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An employee uses a fork lift outside a Lowe's hardware store in Philadelphia, Pennsylvania, U.S. Nov. 4, 2020.MARK MAKELA/Reuters

Lowe’s Cos. Inc. Lowe’s Cos. Inc. forecast holiday-quarter earnings below analysts’ estimates on Wednesday, as the company invests heavily in online business and benefits for employees working through the COVID-19 pandemic.

The home-improvement chain’s shares, which have jumped more than 33 per cent this year on swelling sales of tools and building materials from people upgrading their homes, fell 5 per cent.

To support the rush, Lowe’s has been putting money into upgrading supply chains to get in-demand products on shelves faster, and adding new online shopping features to better compete with larger rival Home Depot Inc.

Lowe’s spending on staff compensation has also risen significantly. It has already paid more than US$800-million in COVID-19 related benefits, and is evaluating more financial assistance for employees in the fourth quarter.

It said it will also spend about US$75-million on additional safety and cleaning measures at its nearly 2,000 stores.

Home Depot on Tuesday said it would boost employees’ wages by about US$1-billion annually.

With the added expenses, Lowe’s expects earnings of US$1.10 to US$1.20 a share in the fourth quarter, compared with analysts’ estimates of US$1.17 a share, according to IBES data from Refinitiv.

Chief executive officer Marvin Ellison said Lowe’s was “not really concerned about the short term” and was making investments in its supply chain, product assortments and new store layouts to boost productivity for the years ahead.

Lowe’s also said it expects to repurchase about US$3-billion of stock in the holiday quarter.

Same-stores sales for the quarter are expected to rise about 15 per cent to 20 per cent, ahead of analysts’ expectation of a 9.6-per-cent increase, which indicates slower growth compared with the 30.1-per-cent surge in the third quarter.

Excluding items, the company earned US$1.98 per share, slightly below estimates of US$1.99 a share in the reported quarter.

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