An exterior view of a Lowe’s home improvement store. Lowe’s Companies, Inc. reports quarterly earnings on Tuesday, May 23, 2023.
Paul Weaver | Lightrocket | Getty Images
Lowe’s on Tuesday lowered its full-year sales outlook, after customers spent less on do-it-yourself projects and caused its fiscal third-quarter sales to tumble nearly 13% year over year.
The home improvement retailer said it now anticipates sales will total about $86 billion for the fiscal year. It had previously expected a range of $87 billion to $89 billion. It projects comparable sales will drop by about 5% this fiscal year, worse than a previously anticipated a decline of between 2% and 4%. The company expects adjusted earnings per share to be about $13, lower than its previously expected range of $13.20 to $13.60.
In a news release, CEO Marvin Ellison said the company felt a “greater-than-expected pullback” by customers on discretionary projects and big-ticket purchases. Yet he said its sales to home professionals, which are accounting for a growing share of its revenue, rose in the quarter. Those pros drive about 25% of its business.
He said the company, which sells Christmas trees and decorations, will next focus on “offering value and convenience this holiday season.”
Here’s how the company did for the fiscal third quarter ended Nov. 3:
- Earnings per share: $3.06, it was not immediately clear if it was comparable to the $3.03 analysts expected, according to consensus estimates from LSEG, formerly known as Refinitiv
- Revenue: $20.47 billion vs. $20.89 billion expected
Lowe’s, like its larger rival Home Depot, faces cooling demand as Americans’ huge, pandemic-fueled appetite for home improvement moderates and higher mortgage rates inject more uncertainty into the housing market.
Ellison warned on an earnings call in August that a pullback in spending on DIY projects would be “the overall theme of how we see the second half of the year.” But he stressed that long term, the home improvement market had bright prospects because of limited housing stock and older average age of homes across the U.S.
In the third quarter, Lowe’s net income was $1.77 billion, or $3.06 per share, compared with $154 million, or 25 cents per share in the year-ago period. That quarter included a $2.1 billion impairment charge as the company left the Canadian market.
Net sales fell from $23.48 billion a year earlier.
Lowe’s competitor, Home Depot, beat Wall Street’s fiscal third-quarter earnings and revenue expectations last week, even as its sales fell 3% year over year. Home Depot said customers are still fixing up their homes, but noticed for the past several quarters that more of them are taking on smaller and less pricey projects.
Home Depot Chief Financial Officer Richard McPhail also said “the worst of the inflationary environment is behind us.”
Shares of Lowe’s have risen about 3% so far this year, but have trailed the approximately 18% gains of the S&P 500. The company’s stock closed on Monday at $204.44, bringing the company’s market value to nearly $118 billion.
This is breaking news. Please check back for updates.
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