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Lowe's beats estimates, even as DIY consumers pull back

Lowe's (LOW) customers pulled back their spending again this quarter.

On Tuesday morning, the home improvement retailer posted revenue of $21.36 billion, higher than the $21.13 billion Wall Street expected. Same-store sales fell 4.1%, a slight improvement from the 4.3% drop seen in Q1 of last year.

The company alluded to a pullback in everyday customers making big-ticket purchases, which was "partially offset by positive comparable sales in Pro and online."

CEO Marvin Ellison said the company "performed well in a challenging home improvement environment," as it adjusted its strategy "to win the early spring customer."


He added that "strong execution and enhanced customer service" helped boost Q1 results, as the company rolled out a DIY loyalty program nationally and expanded same-day delivery with partners like DoorDash (DASH).

Lowe's investment in the Total Home strategy — intended to provide a full range of products to DIYers and pros — was "reflected in our growth in Pro and online," he said.

Adjusted earnings per share came in at $3.06, higher than the $2.95 expected, but a drop compared to the $3.67 from a year ago.

In a note to clients, Telsey Advisory Group's Joe Feldman maintained the firm's Hold rating on Lowe's.

"The industry continues to face headwinds related to the weak housing market trends, consumers remaining cautious with spending, especially on big ticket items and projects, and continued normalization from the pandemic-related gains from the past four years," he said.

In March, existing home sales fell 4.3%.

"Consumers continue to digest and adjust to the monetary tightening," CFO Brandon Sink said on a call with investors, adding that the company is waiting on a catalyst as shoppers "kind of remain on the sidelines."

Ellison said the company is prepared to take "full advantage" once positive trends show up again.

Similar to Home Depot (HD), leaning into serving pros like roofers and contractors could drive sales for Lowe's. Feldman also singled out "enhancing digital, improving installation services, driving localization, and elevating the assortment" as potential ways to grow.

In Home Depot's recent earnings call, executives identified a consumer spending shift toward services, a slower housing market due to higher mortgage rates, and cold, wet weather delaying the spring selling season as headwinds.

Home Depot's head of merchandising, Billy Bastek, said the company saw a drop in bigger DIY projects, "where customers typically use financing to fund the projects, such as kitchen and bath remodel."

The DIY consumer makes up roughly 75% of Lowe's shopper base, compared to just 25% for Home Depot.

Year to date, Lowe's stock is up 2%, lagging the S&P 500's (^GSPC) 11% gain.

BLOOMSBURG, PENNSYLVANIA, UNITED STATES - 2024/05/19: An exterior view of a Lowe's home improvement store at the Buckhorn Plaza shopping center. (Photo by Paul Weaver/SOPA Images/LightRocket via Getty Images)
An exterior view of a Lowe's home improvement store at the Buckhorn Plaza shopping center. (Paul Weaver/SOPA Images/LightRocket via Getty Images) (SOPA Images via Getty Images)

Here's what Lowe's reported, compared to Wall Street estimates, according to Bloomberg consensus:

  • Revenue: $21.36 billion versus 21.13 billion

  • Adjusted earnings per share: $3.06 versus $2.95

  • Same-store sales growth: -4.10 versus - 5.64%

The company reaffirmed its 2024 outlook.

It expects to end the year with total sales of $84 to $85 billion, with same-store sales down 2% to 3% year over year.

Ellison pointed to consumers that are being hit by "interest rate cuts" and "stubborn inflationary pressures," and said they are still choosing experiences over home renovations.

Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at

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