Lowe’s reported a soft first-quarter result, with sales falling 2 per cent to $20.9 billion versus $21.4 billion in the year prior, as cautious consumer spending dampened demand.
The hardware chain posted a 1.7 per cent drop in comparable sales, with the company attributing the decline to unfavorable weather early in the quarter.
While online and pro customer segments showed growth, they were not enough to offset the overall decline. Net earnings fell to $1.6 billion, or $2.92 per diluted share, down from $3.06 a year earlier.
Neil Saunders, MD of GlobalData, said the retailer’s underperformance highlights its vulnerability.
“This is a significant deterioration and one which puts Lowe’s into sharp contrast with rival Home Depot,” Saunders said.
“Lowe’s does not have the same scale of buying power, and with lower operating margins than Home Depot, it has less room to manoeuvre without putting pressure on the bottom line.”
Saunders pointed to a 3.1 per cent year-over-year drop in home sales and ongoing declines in consumer confidence as key external challenges.
He warned that price competition will be critical moving forward, particularly as Home Depot has signaled price stability despite tariff-related pressures.
Strategic priorities
Lowe’s chairman and CEO Marvin Ellison said the company remains focused on strategic priorities, including technology upgrades, refreshed store environments, and enhanced customer service.
“We are continuing to invest in the business and in our people,” Ellison said. “I’d like to extend my appreciation to our front-line associates for their dedication and hard work, especially during the busy spring season.”
Looking ahead, Lowe’s expects full-year sales between $83.5 billion and $84.5 billion, with flat to 1 per cent comparable sales growth. Operating margin is forecast to range from 12.3 to 12.4 per cent.
Saunders added that while Lowe’s is making the right strategic moves, the timing of a recovery remains uncertain.
“Lowe’s is well run and doing many of the right things in terms of investment and service,” he said. “It is well-positioned to gain ground when the market improves, though that rebound may not arrive this year.”
Lowe’s operates 1750 stores across the US.
