A Lowe’s Home Improvement Warehouse worker collects carts in a parking lot on August 17, 2022 in Houston, Texas.
Brandon Bell | Getty Images News | Getty Images
Lowe’s cut its full-year outlook Tuesday, as lumber prices fell and do-it-yourself customers bought fewer discretionary items.
It lowered its forecast even as it beat Wall Street’s revenue and earnings expectations for the fiscal first quarter.
The home improvement retailer said it now expects total sales for the full year to range between $87 billion and $89 billion, lower than the $88 billion to $90 billion it had previously forecast. It said it expects comparable sales to decline by 2% to 4% this fiscal year, below the flat to down 2% that it had said before. It said adjusted earnings per share will range between $13.20 to $13.60, below its previous range of $13.60 to $14.00.
Shares dipped in premarket trading.
Here’s what the home improvement retailer reported for the three-month period ended May 5 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $3.67 adjusted vs. $3.44 expected
- Revenue: $22.35 billion vs. $21.6 billion expected
Lowe’s net income for the three-month period was $2.26 billion, or $3.77 per share, compared with $2.33 billion, or $3.51 per share, a year earlier.
Net sales fell to $22.35 billion from $23.66 billion in the year-ago period, but exceeded Wall Street’s expectations.
Comparable sales dropped 4.3% in the fiscal first quarter. That’s lower than the 3.4% decline that Wall Street expected, according to StreetAccount.
CEO Marvin Ellison said in the company’s news release that lumber deflation, unfavorable weather and lower spending by DIY customers hurt quarterly sales. He said the lowered forecast reflects weaker-than-expected consumer demand.
Yet, he added, Lowe’s digital sales and its comparable sales among home professionals rose in the first quarter compared to the year-ago period.
He said the company remains “optimistic about the medium-to-long term outlook for home improvement and our ability to continue to grow market share.”
Lowe’s competitor, Home Depot, posted a rare revenue miss with its quarterly report last week. The company missed sales expectations for the second consecutive quarter and cut its full-year forecast, as customers skipped big-ticket items like grills and opted for smaller, less expensive home projects.
Like Lowe’s, Home Depot also chalked up lower sales to colder and wetter weather in the western U.S. and falling lumber prices.
Shares of Lowe’s closed Monday at $203.15, bringing the company’s market value to $121.15 billion. Its shares are up nearly 2% so far this year, trailing the S&P 500’s gains of 9%.
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