Lowe’s on Tuesday cut its full-year forecast, as the home improvement retailer’s quarterly sales declined and it said it expects spending on do-it-yourself projects to weaken.
The company said it now expects total sales of between $82.7 to $83.2 billion for the full year, compared with the $84 billion to $85 billion that it previously expected. It said it expects comparable sales to fall by 3.5% to 4%, compared to its prior forecast of a decline of 2% to 3%. It anticipates adjusted earnings per share will be approximately $11.70 to $11.90, compared with the prior outlook of between $12 and $12.30.
Lowe’s cited “lower-than-expected DIY sales and a pressured macroeconomic environment.”
Here’s what the company reported for the fiscal second quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:
- Earnings per share: $4.10 vs. $3.97 expected
- Revenue: $23.59 billion vs. $23.91 billion expected
In the three-month period that ended Aug. 2, Lowe’s net income fell to $2.38 billion, or $4.17 per share, compared with $2.67 billion, or $4.56 per share, in the year-ago period.
Lowe’s got a $43 million pre-tax gain from the sale of its Canadian retail business in 2022, which lifted its earnings in the second quarter. That boosted the company’s earnings per share in the period by 7 cents. Excluding the gain, the company earned $4.10 per share.
Net sales dropped from $24.96 billion in the prior year. Lowe’s posted a year-over-year sales decline for the sixth straight quarter.
Comparable sales, an industry metric that takes out one-time factors like store openings and closures, dropped 5.1%, as the company said customers took on fewer discretionary home projects and unfavorable weather hurt sales of outdoor and seasonal items.
Lowe’s rival, Home Depot, last week beat Wall Street’s quarterly expectations for earnings and revenue. Yet the company said it expects the back half of the year to be weaker than anticipated.
In an interview with CNBC, Home Depot CFO Richard McPhail said customers are not only putting off projects because of higher interest rates, they also have “a sense of greater uncertainty in the economy,” even though most of Home Depot’s customers own homes and are seeing sharp property value gains.
Shares of Lowe’s closed Monday at $243.21. As of Monday’s close, the company’s stock is up about 9%, trailing behind the nearly 18% gains of the S&P 500.
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