Lowe’s, the home improvement retailer, announced a downward revision of its full-year sales outlook due to weaker-than-expected spending on do-it-yourself (DIY) projects. The company reported a sharp decline of nearly 13% in its fiscal third-quarter sales compared to the previous year.
Previously, Lowe’s had projected sales in the range of $87 billion to $89 billion for the fiscal year, but now expects total sales of around $86 billion. Additionally, it anticipates a decline of approximately 5% in comparable sales for the year, worse than the previously expected range of 2% to 4%. Adjusted earnings per share are now projected to be around $13, lower than the earlier range of $13.20 to $13.60.
CEO Marvin Ellison attributed the disappointing sales figures to a greater-than-expected pullback by customers on discretionary projects and big-ticket purchases. However, he noted that the company’s sales to professionals in the home improvement sector increased during the quarter, accounting for a growing share of revenue.
Going forward, Lowe’s plans to focus on providing value and convenience during the upcoming holiday season. Despite the challenges faced, Ellison emphasized the positive long-term outlook for the home improvement market due to factors such as limited housing stock and the aging average age of homes across the U.S.
In the third quarter, Lowe’s reported net income of $1.77 billion, or $3.06 per share, compared to $154 million, or 25 cents per share, in the same period last year. The company also faced a $2.1 billion impairment charge as it exited the Canadian market.
Similar to its competitor Home Depot, Lowe’s is grappling with cooling demand as the surge in Americans’ pandemic-driven interest in home improvement moderates. Additionally, higher mortgage rates have introduced more uncertainty into the housing market.
Despite the challenges, Home Depot exceeded Wall Street’s expectations in its fiscal third-quarter earnings. While its sales fell 3% year over year, the company highlighted that customers continue to invest in home renovations, albeit focusing on smaller and more cost-effective projects.
– <a href=”https://www.cnbc.com/2023/11/23/lowes-lowers-full-year-outlook-as-sales-tumble-in-the-third-quarter.html”>CNBC</a>