Lowe's reported mixed second-quarter results on Wednesday and pulled its full-year sales forecast to the bottom of its prior range, citing pressure on do-it-yourself customers from elevated fuel prices and broader economic uncertainty.
The company now expects total sales of $92 billion for the year, compared with its previous range of $92 billion to $94 billion. It also revised its comparable sales outlook to flat, down from flat to up 2%. Adjusted earnings per share guidance was set at $12.25, compared with the prior range of $12.25 to $12.75.
For the quarter ended July 31, Lowe's reported net income of $2.4 billion, or $4.27 per share, roughly unchanged from the year-ago period. Excluding one-time factors and including tariff refund benefits, adjusted earnings per share came in at $4.40, compared with analyst expectations of $4.22. Revenue of $25.96 billion came in below the $26.16 billion analysts had expected. Comparable sales rose 0.2%, supported by strength in pro and home services. Online sales increased 15.7%, though the company said that gain was partially offset by macroeconomic pressure on DIY customers.
"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."
Ellison noted that July brought "heightened competitive pressures," which he attributed partly to competitors using tariff refund dollars to drive sales. Lowe's itself received an 11-cent per share boost from tariff refunds this quarter. Ellison said he does not believe the July dynamic represents a permanent shift.
"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," he said.
The results arrive one day after rival Home Depot reported that customers are not returning to large projects and that it continues to operate in what it called frozen housing market conditions. Both companies are dealing with a housing market that has slowed sharply, leaving fewer homeowners buying, selling, or undertaking major renovations.
Lowe's shares rose roughly 1% in morning trading despite the guidance revision.
