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Consumers are likely to continue holding off making home improvements, at least in the near future. Like Home Depot HD+2.14%, Lowe’s LOW+1.17% is preparing for the decline.
The home improvement retailer slashed its full-year outlook on Tuesday after it reported quarterly earnings, citing that it expects lower-than-expected do-it-yourself sales and a challenging macro environment to persist. Shares of Lowe’s LOW+1.17% were slightly down in early trading hours.
“Despite a challenging macroeconomic backdrop, especially for the homeowner,” Lowe’s has been able to build momentum with pro customers, Marvin R. Ellison, Lowe’s CEO, said in statement. “As we look ahead, we are confident that we are making the right long-term investments to take share when the market recovers.”
Ellison pointed to the retailer’s “Total Home” strategy as a bright spot that has seen a modest boost from residential and professional shoppers, some of which include contractors, builders, remodelers, and handyman.
Lowe’s reported second-quarter revenue of $23.59 billion, missing Wall Street’s expectation of $23.91 billion, according to FactSet FDS+0.46%. The company now forecasts full-year sales to be between $82.7 billion to $83.2 billion, down from its previous estimate of $84 billion to $85 billion.
“While we never love negative revisions, we think investors already anticipated a similar change,” Truist Securities said in a research note.
Analysts also suggested that while short-term conditions may be challenging, potential rate cuts could be beneficial, adding that they remain optimistic for medium and long-term investments.