Lowe’s posts bigger-than-expected drop in same-store sales

Lowe’s posts bigger-than-expected drop in same-store sales

© Reuters. FILE PHOTO: Shoppers load a box of merchandise into a truck after visiting a Lowe’s hardware store in Philadelphia, Pennsylvania, U.S. November 4, 2020. REUTERS/Mark Makela

(Reuters) – Lowe’s (NYSE:) Cos Inc reported a bigger-than-expected drop in same-store sales on Wednesday, as demand eased for its home-improvement tools and building materials from pandemic highs.

Americans hunkered down during the lockdowns engaged in more do-it-yourself (DIY) home projects, lifting sales of paint and building materials at Lowe’s and bigger rival Home Depot (NYSE:) in 2020.

The U.S. housing boom is showing signs of cooling due to rising mortgage rates, while sales to DIY customers have slowed significantly with more people returning to offices.

“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.

The home improvement chain reaffirmed its fiscal 2022 outlook, while bigger rival Home Depot raised it on Tuesday.

Lowe’s 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.

Same-store sales decreased 4% in the first quarter, compared with Wall Street expectation of a 2.5% fall, according to IBES data from Refinitiv.

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