Lowe’s on Wednesday reported mixed quarterly results as the home improvement retailer said it saw “pressure” in spending on projects.
Though the company did not cut its full-year guidance, it updated its outlook to the bottom end of its prior guidance. It now expects total sales of $92 billion, compared with $92 billion to $94 billion previously, and comparable sales to be flat, versus flat to up 2%. It expects adjusted earnings per share for the year of $12.25, versus $12.25 to $12.75 previously.
Shares of Lowe’s rose roughly 4% in morning trading despite the cautious outlook.
“While the long-term fundamentals supporting home improvement remain intact, the near-term environment continues to be dynamic,” CEO Marvin Ellison said on a call with analysts. “Elevated fuel prices, combined with broader economic uncertainty have influenced household budgets. Customers continue to tell us that they’re being cautious about their spending and prioritizing where and when they invest in their homes as a result, discretionary DIY demand remains under pressure.”
Here’s how the company performed in its fiscal second quarter compared with what Wall Street was expecting, according to a survey of analysts by LSEG:
- Earnings per share: $4.40 adjusted vs. $4.22 expected
- Revenue: $25.96 billion vs. $26.16 billion expected
For the quarter ended July 31, Lowe’s reported net income of $2.4 billion, or $4.27 per share, roughly the same as the year-ago period. Excluding one-time factors and including tariff refund benefits, the company reported adjusted earnings of $4.40 per share.
Lowe’s also said tariff refunds provided an 11-cent boost to its earnings per share this quarter.
The company reported total sales of $25.96 billion for the quarter, up from $23.96 billion the year prior. Comparable sales rose 0.2%, due in part to strong performance in its pro and home services sales, according to Lowe’s.
Lowe’s also saw a 15.7% increase in online sales, though it added that performance was partially offset by macroeconomic pressures for the do-it-yourself customers.
Ellison said on the call that the company saw “heightened competitive pressures” in July, but added that Lowe’s is committed to providing value, innovation and differentiation to beat its competitors.
He emphasized that Lowe’s does not believe the July impact is “the new normal” and is instead “transitory.”
“We think it’s the result of competitors having tariff refund dollars and looking for different ways to use those dollars to drive the top line, and so we don’t see this as something that’s going to shift historically,” Ellison said on the call.
The earnings come as the home improvement retailer grapples with a slower housing market and a more cautious consumer.
Lowe’s rival Home Depot said in its earnings report on Tuesday that the company did not see customers returning to big projects and continues to operate in “frozen housing market conditions.”
