(Reuters) – Lowe’s Cos Inc lowered its full-year forecast for like-for-like sales and profit on Tuesday as demand for DIY products slows and high inflation forces consumers to cut discretionary spending.
Lowe’s shares were down about 2% in pre-market electronic trading, as the group also reported first-quarter comparable sales below expectations.
Persistent inflation has strained U.S. household budgets, prompting consumers to put home improvement projects on hold and limiting sales of tools, building materials and appliances at home improvement chains.
Last week, Lowe’s arch-rival Home Depot Inc. also lowered its annual forecast. Americans are now prioritizing travel, leisure activities and other services instead of investing more in their homes.
Although sales to “professional customers,” including professional builders, contractors and do-it-yourselfers, were positive in the past quarter, the company is bracing for weaker-than-expected demand for discretionary purchases, its CEO said. CEO Marvin Ellison.
About 75% of Lowe’s sales come from do-it-yourself customers and the rest from professionals, unlike Home Depot, where do-it-yourselfers make up only about half of the customer base.
Lowe’s now expects like-for-like sales to fall 2% to 4% for the full year, compared to the group previously forecasting flat or down sales of up to 2%.
It also forecast full-year adjusted earnings of $13.20 to $13.60 per share, down from a previous guidance of $13.60 to $14.00.
In the first quarter, like-for-like sales fell 4.3%, where analysts expected a smaller decline, 3.23% according to data from Refinitiv.
(Report Deborah Sophia in Bangalore; French version Victor Goury-Laffont, edited by Blandine Hénault)
Copyright © 2023 Thomson Reuters