Lowe’s (LOW) customers pulled back their hammers and nails again this quarter.
On Tuesday morning, the home improvement retailer posted revenue of $21.36 billion, higher than the $21.13 billion Wall Street expected. Same-store sales fell 4.1%, a slight improvement from the 4.3% drop seen in Q1 of last year.
The company alluded to a decline in everyday customers pulling back on big ticket items, which was “partially offset by positive comparable sales in Pro and online.”
CEO Marvin Ellison said “strong execution and enhanced customer service” helped boost Q1 results, as the company rolled out a DIY loyalty program nationally and expanded same-day delivery.
He added that its investment in the Total Home strategy — intended to provide a full range of products to DIYers and pros — was “reflected in our growth in Pro and online.’
Adjusted earnings per share came in at $3.06, higher than the $2.95 expected, but a drop compared to the $3.67 from a year ago.
In a note to clients, Telsey Advisory Group’s Joe Feldman maintained the firm’s Hold rating on Lowe’s.
“The industry continues to face headwinds related to the weak housing market trends, consumers remaining cautious with spending, especially on big ticket items and projects, and continued normalization from the pandemic-related gains from the past four years,” he said.
In March, existing home sales fell 4.3%.
However, similar to Home Depot (HD), leaning into serving pros like roofers and contractors could drive sales. Feldman also identified “enhancing digital, improving installation services, driving localization, and elevating the assortment,” as potential ways to grow.
In Home Depot’s recent earnings call, executives identified a consumer spending shift toward services, a slower housing market due to higher mortgage rates, and cold, wet weather delaying the spring selling season.
Home Depot’s head of merchandising, Billy Bastek, also said the company saw a drop in bigger DIY projects, “where customers typically use financing to fund the projects, such as kitchen and bath remodel.”
The DIY consumer makes up roughly 75% of Lowe’s shopper base, compared to just 25% for Home Depot.
Shares of the company are seeing a pop in pre-market trading, up nearly 3%.
Year to date, shares are up 3%, lagging the S&P 500’s (^GSPC) 11% gain.
Here’s what Lowe’s reported, compared to Wall Street estimates, according to Bloomberg consensus:
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Revenue: $21.36 billion versus 21.13 billion
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Adjusted earnings per share: $3.06 versus $2.95
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Same-store sales growth: -4.10 versus – 5.64%
The company reaffirmed its 2024 outlook.
It expects to end the year with total sales of $84 to $85 billion, with same store sales down 2% to 3% year over year.
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Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.