Lowe’s reports 5% sales drop, lower forecast

On Aug. 20, Lowe’s Companies, Inc. presented its second quarter 2024 financial results. Total sales for the quarter were $23.6 billion, compared to $25.0 billion in the prior-year quarter. Comparable sales for the quarter decreased 5.1% driven by continued pressure in DIY bigger ticket discretionary spending and unfavorable weather adversely impacting sales in seasonal and other outdoor categories, partially offset by positive comparable sales in Pro and online.

Lowe’s reported net earnings of $2.4 billion and diluted earnings per share (EPS) of $4.17 for the quarter ended Aug. 2, 2024, compared to diluted EPS of $4.56 in the second quarter of 2023. 

Lowe’s lowered its full-year projection, saying it now expects total sales of $82.7 to $83.2 billion, down from its previous forecast of $84 to $85 billion. The company said it expects comparable sales to be down -3.5 to -4.0% as compared to prior year (previously down -2 to -3%) As such, it also adjusted operating income as a percentage of sales (adjusted operating margin) of 12.4 to 12.5% (previously 12.6 to 12.7%).

“The company delivered strong operating performance and improved customer service despite a challenging macroeconomic backdrop, especially for the homeowner. At the same time, we continue to build momentum with our Total Home strategy reflected by our mid-single-digit positive comps with the Pro customer this quarter,” said Marvin R. Ellison, Lowe’s chairman, president and CEO. “As we look ahead, we are confident that we are making the right long-term investments to take share when the market recovers. I’d like to extend my appreciation to our dedicated frontline associates who remain committed to serving our customers.” 

CNBC reports that about 25% of Lowe’s sales come from professional users and contractors compared with about half of Home Depot’s sales. Over the past five years, Lowe’s has been trying to attract more home professionals, which tend to be steadier and more lucrative customers, by tailoring its merchandising assortment, delivering orders to job sites and offering a loyalty program. Ellison said that effort has paid off, with pros now “the strongest segment of our overall business.”

As of Aug. 2, 2024, Lowe’s operated 1,746 stores representing 194.9 million square feet of retail selling space.