11 days ago • 1 min
What’s going on here?
Lowe’s gave investors a debrief on Tuesday, revealing a slimmer profit outlook on the back of worse-than-expected sales.
What does this mean?
High mortgage rates have squashed any Americans’ dreams of moving house, let alone having enough leftover cash to spruce up their new digs. That’s not what Lowe’s wants to hear, though. The home improvement retailer said with folk turned off DIY projects, same-store sales – that’s revenue excluding any shuttered or new stores – slipped more than 7% last quarter versus the same time last year. Investors weren’t expecting that, especially because rival Home Depot had reported better-than-expected sales just one week ago. Lowe’s made sure to keep expectations in check going forward too, adjusting its full-year revenue forecast to account for a drop in same-store sales that was almost double previous predictions.
Why should I care?
Zooming in: Your audience matters.
Home Depot’s relative success isn’t a total shock, though: professional contractors make up roughly half of the chain’s sales, about double what they do for Lowe’s. And while the state of the housing market is putting DIY-ers off home improvements, the pros are still working through project backlogs that built up over the last few years. That explains how Home Depot pulled off a dip in same-store sales that was less than half of Lowe’s.
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Lowe’s wasn’t the only retailer revealing struggles: electronics giant Best Buy blamed cash-strapped customers for its squashed sales forecast on Tuesday. See, now that US customers have bled their pandemic savings dry, they’re relying on disposable income to buy their nice-to-haves. Problem is, there isn’t much of that around these days. There’s a strong chance, then, that Americans will be downgrading their lists to Santa this year.
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