Lowe’s sales decline as cool spring weather weighs on demand for outdoor products

Lowe’s on Wednesday missed Wall Street’s sales expectations for the first quarter, as cooler spring weather hurt demand for supplies for outdoor do-it-yourself projects.

Shares were down more than 2% in premarket trading.

The company reiterated its full-year outlook, saying it expects total sales to range between $97 billion and $99 billion and same-store sales to range from a decline of 1% to an increase of 1%.

Here’s what the company reported for the quarter ended April 29 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

• Earnings per share: $3.51 vs. $3.22 expected
• Revenue: $23.66 billion vs. $23.76 billion expected

Lowe’s results diverged from those of its competitor, Home Depot. On Tuesday, Home Depot surged beyond Wall Street’s expectations for quarterly earnings and revenue, chalking up its growth to home appreciation and a boom in projects for home professionals.

Lowe’s, however, has a different mix to its business. It has historically gotten about 75% to 80% of its total sales from DIY customers compared with Home Depot, which gets about half of its sales from them. That makes Lowe’s more vulnerable to shifts in demand, if homeowners decide to skip a painting or landscaping project.

“Our sales this quarter were in line with our expectations, excluding our outdoor seasonal categories that were impacted by unseasonably cold temperatures in April,” CEO Marvin Ellison said in Wednesday morning’s earnings release. “Now that spring has finally arrived, we are pleased with the improved sales trends we are seeing in May.”

Lowe’s net income for the quarter increased slightly to $2.33 billion, or $3.51 per share, from $2.32 billion or $3.21 per share, a year earlier. The results were above the $3.22 expected by analysts surveyed by Refinitiv.

Net sales fell to $23.66 billion from $24.42 billion last year and outpaced analysts’ expectations of $23.76 billion.

Same-store sales declined 4% year over year, a larger decrease than the 2.5% drop that analysts expected, according to StreetAccount.

As of Tuesday’s close, shares of Lowe’s are down about 25% so far this year. Shares closed Tuesday at $194.03, bringing the company’s market value to $128.27 billion.

This story is developing. Please check back for updates.