While an overall sales decline of 9.2 per cent looks extremely gloomy for Lowe’s, it is dragged down by the company’s exit from its Canadian business and a slight timing shift in this year’s reporting.

As such, it is not fully representative of the underlying performance at Lowe’s. This is revealed by the comparable sales number which declined by 1.6 per cent – a slightly more modest drop than Home Depot’s 2 per cent decline.

That both retailers are in the same ballpark when it comes to sales is a function of a home improvement market that is rolling backward rather than accelerating forward. After a long period of elevated spending, the consumer has finally run out of steam and is retrenching on both the number and scale of improvement projects they undertake. This is not helped by a weak housing market where fewer people are moving – an activity that usually stimulates a flurry of DIY spending.

Pleasingly, Lowe’s decline was more modest than last quarter and is quite some way better than the company’s guidance for the full year. Most of this is because of a strong start to the quarter which saw a mini-boom in smaller projects such as garden refreshes and light decorating. Some of these were tasks left over from the previous quarter which had been delayed due to poor weather, and some were the result of consumers preparing for the summer months ahead. Lowe’s plays strongly in the seasonal space and pulled out all the stops to ensure solid ranges and displays in store, which paid dividends. Even so, the uptick in certain categories was nowhere near enough to offset the wider decline in larger projects by consumers.

An area of strength for Lowe’s, and one of the reasons why its comparable numbers were slightly above those of Home Depot, is in the professional segment. Our general sense is that improvement spending from this group is down overall, but Lowe’s has a more embryonic professional business than Home Depot so is still benefitting from an increase in customer numbers. This, in turn, is driving some modest year-over-year growth. Most of this is down to better marketing and the continued improvement in the services offered to pro-shoppers. We believe this dynamic will continue to provide some relief over the balance of this year although, again, it will not be sufficient to completely counteract the more negative trends elsewhere.

Given a tougher environment that is likely to persist for the foreseeable future, we are pleased with Lowe’s focus on optimizing its operations. The business is pulling levers it can control, such as localizing ranges in stores to be more sensitive to consumer needs. This includes the so-called ‘rural merchandising framework’ which will see certain shops stock a wider array of outdoor farm and ranch products. As evidenced from various trials, this initiative helps to increase sales and productivity of rural stores that have, hitherto, been a bit lackluster in terms of performance. Lowe’s is clearly taking aim at the success of Tractor Supply in a bid to win new customers.

Online is another area of focus with the recent rollout of same-day delivery nationwide expected to deliver some gains. This is a sensible addition as convenience and speed are crucial in the home improvement market.

All these things are about generating incremental growth to try and offset the chill winds of a slowdown. Even so, the outlook for the full fiscal year remains negative with comparable likely to drop between 2 and 4 per cent.

Given the extensive gains of prior years, this isn’t too bad even if it does signal a dramatic change in trajectory.

• Neil Saunders is MD at GlobalData.