Lowe’s (LOW) earnings Q1 2023

A Lowe’s Home Improvement Warehouse worker assembles carts in a parking lot on August 17, 2022 in Houston, Texas.

Brandon Bell | Getty Images News | Getty Images

Lowe’s cut its full-year outlook Tuesday as lumber prices fell and do-it-yourselfers bought fewer discretionary items.

It lowered its forecast even as it beat Wall Street’s expectations for revenue and earnings for the fiscal first quarter.

The home improvement retailer said it now expects total full-year sales to range between $87 billion and $89 billion, down from the $88 billion to $90 billion it had previously forecast. It said it expects comparable sales to fall 2% to 4% this fiscal year, below the flat to down 2% it had said before. It said adjusted earnings per share would range between $13.20 to $13.60, below the previous range of $13.60 to $14.00.

Shares fell in pre-market trading.

Here’s what the home improvement store reported for the three-month period ended May 5 compared with what Wall Street expected, based on a survey of analysts by Refinitiv:

  • Earnings per share: $3.67 adjusted vs. $3.44 expected
  • Revenue: $22.35 billion vs. $21.6 billion expected

Lowe’s net income for the three-month period was $2.26 billion, or $3.77 per share, compared with $2.33 billion, or $3.51 per share, a year earlier.

Net sales fell to $22.35 billion from $23.66 billion in the same period last year, but beat Wall Street expectations.

Comparable sales fell 4.3% in the first quarter of the financial year. That’s lower than the 3.4% decline that Wall Street expected, according to StreetAccount.

CEO Marvin Ellison said in the company’s press release that lumber deflation, unfavorable weather and lower spending by do-it-yourself customers hurt quarterly sales. He said the lowered forecast reflects weaker-than-expected consumer demand.

Still, he added, Lowe’s digital sales and its comparable sales among home professionals increased in the first quarter compared with the year-ago period.

He said the company remains “optimistic about the medium- to long-term outlook for home improvement and our ability to continue to grow market share.”

Lowe’s competitor, Home Depot, posted a rare earnings miss with its quarterly report last week. The company missed sales expectations for the second quarter in a row and cut its full-year forecast, as customers skipped big-ticket items like grills and opted for smaller, more affordable home projects.

Like Lowe’s, Home Depot has also seen lower sales due to colder, wetter weather in the western United States and falling lumber prices.

Shares of Lowe’s closed Monday at $203.15, bringing the company’s market capitalization to $121.15 billion. Shares are up nearly 2% so far this year, trailing the S&P 500’s 9% gain.

This is breaking news. Please check back for updates.

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