Lowe’s, one of the most popular home improvement stores, recently reported a decrease in sales for the third quarter of the fiscal year. The company lowered its full-year sales outlook after a steep drop in sales, specifically in do-it-yourself projects, caused fiscal third-quarter sales to tumble nearly 13% year over year.
Lowe’s now expects sales to total approximately $86 billion for the fiscal year, lower than its previous range of $87 billion to $89 billion. Comparable sales are also projected to drop about 5% this fiscal year, worse than previously anticipated. CEO Marvin Ellison stated that customers showed a “greater-than-expected pullback” on discretionary projects and big-ticket purchases, but sales to home professionals, which account for 25% of its business, rose in the quarter.
The company also provided its third-quarter performance, reporting earnings per share of $3.06, which was not immediately comparable to analysts’ expected $3.03. Revenue amounted to $20.47 billion, missing estimates of $20.89 billion.
Lowe’s, like its rival Home Depot, is currently facing cooling demand as the pandemic-fueled appetite for home improvement moderates and higher mortgage rates inject more uncertainty into the housing market. Ellison had previously warned of a pullback in spending on DIY projects but emphasized the bright prospects of the home improvement market in the long term.
Despite the decrease in sales, Lowe’s competitor, Home Depot, managed to beat Wall Street’s expectations for the fiscal third quarter, even as its sales fell 3% year over year. Home Depot attributed the drop to customers taking on smaller and less expensive projects.
Shares of Lowe’s have risen about 3% so far this year, with the company’s stock closing at $204.44 on Monday, bringing its market value to nearly $118 billion. The company plans to focus on providing “value and convenience” during the upcoming holiday season in hopes of boosting sales.
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