- Lowe's missed quarterly sales estimates and cut its forecast as DIY project demand slowed.
- The home improvement retailer's revenue and comparable store sales declined amid a drop in DIY discretionary spending, especially for big-ticket items.
- Lowe's benefited from an increase in business from professional contractors.
Shares of Lowe’s (LOW) dropped over 2% in early trading Tuesday after the home improvement retailer missed revenue expectations and slashed its outlook as the booming demand for home upgrades during the pandemic faded.
Lowe’s now expects full-year earnings per share (EPS) of about $13, and revenue at $86 billion. That’s down from its previous estimates of EPS in the range of $13.20 to $13.60, and revenue of $87 billion to $89 billion. In addition, the company projects comparable store sales falling 5% versus its earlier forecast of a drop of between 2% and 4%.
In its fiscal 2023 third quarter, Lowe’s reported EPS of $3.06, better than expected, but sales fell 12.8% from a year ago to $20.47 billion, less than anticipated. Comparable store sales slipped 7.4%.
CEO Marvin Ellison blamed the lackluster results and guidance on a decline in discretionary spending for do-it-yourself (DIY) projects, especially big-ticket items. He noted that because so much of Lowe’s revenue is generated by DIY consumers, the “greater-than-expected” pullback “disproportionately impacted our third quarter comp performance.” However, he explained that Lowe’s benefited from increased demand from professional contractors.
With Tuesday's losses, Lowe’s shares were little changed for 2023.?