Lowe's sales disappoint as late spring hurts seasonal demand
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Lowe's Cos Inc. reported a bigger-than-expected drop in same-store sales on Wednesday, as cold and wet weather during April hit demand for seasonal goods.
Same-store sales decreased 4% in the first quarter ended April 29, compared with Wall Street's expectation of a 2.5% fall.
Seasonal goods account for 35% of Lowe's first quarter, meaning the cooler weather will impact the company more than it affected Home Depot Inc, D.A. Davidson wrote in a note, ahead of the earnings report.
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Lowe's is also dependent on do-it-yourself (DIY) customers for sales. The return of people to offices is affecting demand from DIY customers.
"Because 75% of our customer base is DIY, our Q1 sales were disproportionately impacted by the cooler spring temperatures," Chief Executive Officer Marvin Ellison said in a statement.
|LOW||LOWE’S COS. INC.||193.87||-0.85||-0.44%|
Home Depot executives said on Tuesday more customers would buy seasonal goods at its stores in the current quarter after its seasonal categories posted a double-digit decline in comparable sales for the first quarter.
Lowe's also reaffirmed its fiscal 2022 outlook.
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In contrast, Home Depot posted a surprise rise in quarterly comparable sales and increased its annual forecasts, saying growth in sales to professionals including builders and handymen outpaced that to DIY customers.
Lowe's shares, down 25% this year, fell 1.6% in premarket trading.
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Net earnings edged higher to $2.33 billion, or $3.51 per share, from $2.32 billion, or $3.21 per share, a year earlier. Analysts had expected $3.22 per share, according to IBES data from Refinitiv.
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(Reporting by Praveen Paramasivam in Bengaluru; Editing by Sriraj Kalluvila)
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