Lowe's is sticking to its full-year forecast. The company said it expects total sales to be between $84 billion and $85 billion, down from $86.38 billion in fiscal 2023. The company expects comparable sales to decline 2% to 3% year-over-year and earnings per share to decline from $86.38 billion in fiscal 2023. Approximately $12 to $12.30.
Marvin Ellison said in an interview with CNBC that a variety of factors are preventing consumers from spending freely, including pressures from inflation and uncertainty about when the Federal Reserve will cut interest rates.
“Interest rates may come down, but we still need consumer confidence to recover,” he said.
He said Lowe's is holding off on raising its full-year outlook as it waits for its biggest sale date. Spring is the holiday season for home renovations.
Below is a comparison of the company's first-quarter financial report to Wall Street expectations, based on a survey of analysts by LSEG.
- Earnings per share: $3.06 vs. $2.94 expected
- Revenue: $21.36 billion vs. expected $21.12 billion
Lowe's net income for the three months ended May 3 fell to $1.76 billion, or $3.06 per share, from $2.26 billion, or $3.77 per share, in the year-ago period.
Revenue decreased from $22.35 billion in the same period last year. This is the fifth consecutive quarter in which Lowe's sales have declined year-over-year.
Shoppers visited fewer Lowe's stores and websites as homeowners postponed large projects and cut back on big-ticket purchases. Transaction value was down 3.1% and the average number of tickets was down 1% compared to the same period last year, Ellison said.
He told CNBC that customers are buying fewer discretionary items like outdoor grills and patio sets, and taking on fewer projects like kitchen remodels.
Compared to Home Depot, Lowe's receives less business from painters, contractors, and other home professionals. They tend to provide more stable business even when do-it-yourself customers leave. About half of Home Depot's sales come from professionals, compared to about 20-25% of Lowe's sales.
But Lowe's has been trying to attract more professional customers. Gains from professional customers and growth in online sales helped partially offset the decline in DIY spending.
Comparable sales for the quarter were down 6.2%. However, for professional customers, comparable sales were flat in the quarter.
Lowe's is in the same situation as the same period last year, when the company lowered its full-year forecast and sales decreased compared to the same period last year. At the time, Ellison warned investors that the company expected “a decline in consumer discretionary spending in the near term.”
In the three quarters since then, Lowe's sales have declined year over year.
Lowe's stock closed Monday at $229.17, giving the company a market value of $131.13 billion. As of Monday's close, the company's stock had risen nearly 3% since the beginning of the year, lagging the S&P 500's 11% rise.