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Lowe's (LOW) delivered on subdued expectations after years of post-pandemic struggles.
The home improvement chain reported earnings on Wednesday morning that matched estimates on revenue and beat on earnings. Revenue fell 2% year over year to $20.93 billion, while adjusted earnings per share dropped 4.6% to $2.92, compared to the $2.88 expected.
The results "reflect ongoing pressure in DIY bigger ticket discretionary demand" and a "slower start to spring" due to poor February weather, Lowe's CEO Marvin Ellison said on the earnings call. He added the company contends with "significant macro uncertainty" and "ongoing challenges in the housing market."
Same-store sales fell 1.7%, better than the 2.04% decline expected. That's a reversal after same-store sales growth turned positive in Q4 for the first time in roughly two years. The average ticket jumped 2.1%, while transactions fell 3.8%.
Growth in pro and online sales mitigated some of the weather effects. Online sales were up 6%, and the company has been investing in its pro business with the acquisition of Artisan Design Group.
Lowe's stock fell 1% in morning trading. Prior to Wednesday's report, Lowe's stock was down roughly 6% year to date versus a 1% gain for the S&P 500 (^GSPC).
Rival Home Depot's (HD) stock was down 3.1% year to date. It reported mixed earnings results on Tuesday as it reiterated guidance and said it will not raise prices due to tariffs.
Read more about retailer stock moves and today's market action.
Here's what Lowe's reported for its first quarter earnings compared to Wall Street consensus estimates, according to Bloomberg:
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Revenue: $20.93 billion, versus $20.93 billion
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Adjusted earnings per share: $2.92, versus $2.88
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Same-store sales growth: -1.7%, versus -2.04%
The company reiterated its guidance for the 2025 fiscal year. Total sales are projected to be $83.5 billion to $84.5 billion, while same-store sales are expected to be flat to up 1% year over year.
Tariff uncertainty remains a top concern. The US temporarily dropped tariffs on Chinese imports from 145% to 30%, while so-called reciprocal tariffs have been suspended for a 10% universal duty. However, rates are still much higher than they were historically, and the changing tariff environment has tanked consumer sentiment.
Read more: What Trump's tariffs mean for the economy and your wallet
Lowe's sources 20% of its sales from China, including items like ceiling fans, small appliances, and tools. It will have a tougher time mitigating tariffs compared to Home Depot, TD Cowen analyst Max Rakhlenko wrote in a note prior to earnings. He added that Home Depot is "better positioned to manage tariffs," partially due to its larger pro business.
