Lowe’s Cos Inc has cut its annual sales and profit forecasts, joining larger rival Home Depot in highlighting waning demand for home improvement tools. The shift in spending to services, falling lumber prices and a damp start to the Spring season have all contributed to the squeeze on sales. Lowe’s expects full-year comparable sales to fall between 2% and 4%, compared to its prior outlook of flat to down 2%.
In the first quarter, Lowe’s reported a steeper-than-expected fall in comparable sales, but it topped profit expectations, with margins holding up better thanks to tighter cost control. While demand from Lowe’s core do-it-yourself customers came in weaker than anticipated, strength in sales to its “Pro-customers” helped offset some of that.
Analysts warned Lowe’s could trim its outlook again this year, but the results were not as bad as feared after Home Depot’s gloomy outlook last week. Investors responded positively, with shares reversing premarket losses and rising 2% in morning trading.