A customer pushes a shopping cart into the entrance of a Lowe’s store in Concord, Calif., on Tuesday, February 23, 2021.
David Paul Morris | Bloomberg | Getty Images
On Wednesday, Lowe’s fell short of Wall Street’s first-quarter sales expectations as cooler spring weather dampened demand for materials for DIY outdoor projects.
Shares fell more than 2% in premarket trading.
The company reiterated its guidance for the full year, saying it expects total sales to be between $97 billion and $99 billion, with same-store sales ranging from a 1% decline to a 1% increase.
Here’s what the company said for the quarter ended April 29, compared to what Wall Street expected based on a Refinitiv poll of analysts:
- Earnings per share: $3.51 vs. $3.22 expected
- Revenue: $23.66 billion vs. $23.76 billion expected.
Lowe’s results differed from those of its rival Home Depot. On Tuesday, Home Depot beat Wall Street’s expectations for quarterly earnings and earnings, attributing its rise to rising housing costs and a boom in projects for home improvement professionals.
However, Lowe’s takes a different approach to its business. Historically, 75% to 80% of total sales come from do-it-yourself shoppers, compared to Home Depot, which gets about half of its sales from them. This leaves Lowe’s more vulnerable to changes in demand if homeowners choose to skip a painting or landscaping project.
“Our sales this quarter were in line with our expectations, with the exception of our seasonal outdoor product categories, which were impacted by unseasonably low temperatures in April,” CEO Marvin Ellison said in an earnings call Wednesday morning. “Now that spring has finally arrived, we are pleased with the improvement in the sales trends we are seeing in May.”
Lowe’s net income for the quarter increased slightly to $2.33 billion, or $3.51 per share, from $2.32 billion, or $3.21 per share, a year earlier. The results came in above the $3.22 expected by analysts polled by Refinitiv.
Net sales fell to $23.66 billion from $24.42 billion last year and beat analysts’ expectations of $23.76 billion.
Same-store sales are down 4% year-on-year, according to StreetAccount, more than the 2.5% drop analysts had expected.
As of Tuesday’s close, Lowe’s shares are down about 25% this year. The shares closed Tuesday at $194.03, giving the company a market value of $128.27 billion.
This story is evolving. Please stay tuned for updates.