Lowe's (LOW) customers withdrew their hammers and nails again this quarter.
On Tuesday morning, the home improvement retailer posted sales of $21.36 billion, which beat Wall Street's expectations of $21.13 billion. Same-store sales fell 4.1%, a slight improvement from the 4.3% decline in the first quarter of last year.
The company hinted that everyday customers were holding back on big-ticket purchases, “partially offset by positive comparable sales in professional and online.”
Chief Executive Officer Marvin Ellison said “strong execution and enhanced customer service” helped boost first-quarter results as the company rolled out its DIY loyalty program nationwide and expanded same-day delivery. He said he was connected.
He added that investments in the Total Home strategy, which aims to offer a full range of products to DIY enthusiasts and professionals, are “reflected in our growth in professional and online”.
Adjusted earnings per share were $3.06, beating expectations of $2.95 but down from $3.67 in the year-ago period.
Telsey Advisory Group's Joe Feldman maintained his firm's “hold” rating on Lowe's in a note to clients.
“The industry continues to face headwinds related to weak trends in the housing market, consumers being cautious about spending, especially on big-ticket items and projects, and the continued normalization of pandemic-related gains over the past four years,” he said. “There is,” he said.
Existing home sales fell 4.3% in March.
However, like Home Depot (HD), relying on service professionals such as roofing contractors and contractors could increase sales. Feldman also cited “digital enhancements, improved installation services, increased localization, and increased product selection” as potential ways to grow.
At Home Depot's recent earnings conference, executives pointed to a shift in consumer spending toward services, a slump in the housing market due to rising mortgage rates, and a delay in the spring sales season due to cold and rain.
Billy Bastek, Home Depot's head of merchandising, said the company has seen a decline in large-scale DIY projects, such as kitchen and bathroom remodels, where “customers often use loans to finance projects.” said.
DIY consumers make up about 75% of Lowe's shopper base, but only 25% at Home Depot.
The company's shares were soaring in premarket trading, up nearly 3%.
Year-to-date, the stock has increased 3%, lagging the S&P 500 Index (^GSPC), which has gained 11%.
Here's how Lowe's report compares to Wall Street estimates, according to Bloomberg Consensus.
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Revenue: $21.36 billion vs. $21.13 billion
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Adjusted earnings per share: $3.06 vs. $2.95
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Same-store sales growth: -4.10 vs. -5.64%
The company reaffirmed its 2024 outlook.
The company expects same-store sales to decline 2% to 3% year over year, ending the year with total sales of $84 billion to $85 billion.
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Brooke DiPalma is a senior reporter at Yahoo Finance. Follow her on Twitter @brooke dipalma Or email bdipalma@yahoofinance.com.
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