Lowe’s cuts full-year sales forecast, as spending on do-it-yourself projects weakens

A Lowe’s Home Improvement Warehouse employee collects carts in a parking zone on August 17, 2022 in Houston, Texas. 

Brandon Bell | Getty Images News | Getty Images

Lowe’s lower its full-year outlook Tuesday, as lumber costs fell and do-it-yourself clients purchased fewer discretionary objects.

It lowered its forecast even as it beat Wall Street’s income and earnings expectations for the fiscal first quarter.

The dwelling enchancment retailer stated it now expects complete sales for the total yr to vary between $87 billion and $89 billion, decrease than the $88 billion to $90 billion it had beforehand forecast. It stated it expects comparable sales to say no by 2% to 4% this fiscal yr, under the flat to down 2% that it had stated earlier than. It stated adjusted earnings per share will vary between $13.20 to $13.60, under its earlier vary of $13.60 to $14.00.

Shares dipped in premarket buying and selling.

Here’s what the house enchancment retailer reported for the three-month interval ended May 5 in contrast with what Wall Street was anticipating, based mostly on a survey of analysts by Refinitiv:

  • Earnings per share: $3.67 adjusted vs. $3.44 anticipated
  • Revenue: $22.35 billion vs. $21.6 billion anticipated

Lowe’s web revenue for the three-month interval was $2.26 billion, or $3.77 per share, in contrast with $2.33 billion, or $3.51 per share, a year earlier.

Net sales fell to $22.35 billion from $23.66 billion within the year-ago interval, however exceeded Wall Street’s expectations.

Comparable sales dropped 4.3% within the fiscal first quarter. That’s decrease than the three.4% decline that Wall Street anticipated, in accordance with StreetAccount.

CEO Marvin Ellison stated within the firm’s information launch that lumber deflation, unfavorable climate and decrease spending by DIY clients damage quarterly sales. He stated the lowered forecast displays weaker-than-expected shopper demand.

Yet, he added, Lowe’s digital sales and its comparable sales amongst dwelling professionals rose within the first quarter in comparison with the year-ago interval.

He stated the corporate stays “optimistic in regards to the medium-to-long time period outlook for dwelling enchancment and our potential to proceed to develop market share.”

Lowe’s competitor, Home Depot, posted a rare revenue miss with its quarterly report final week. The firm missed sales expectations for the second consecutive quarter and lower its full-year forecast, as clients skipped big-ticket objects like grills and opted for smaller, cheaper dwelling projects.

Like Lowe’s, Home Depot additionally chalked up decrease sales to colder and wetter climate within the western U.S. and falling lumber costs.

Shares of Lowe’s closed Monday at $203.15, bringing the corporate’s market worth to $121.15 billion. Its shares are up practically 2% thus far this yr, trailing the S&P 500’s features of 9%.

This is breaking information. Please test again for updates.

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