Lowes on Wednesday published quarterly results above expectations in terms of turnover and net profit and reaffirmed its outlook for the whole year.
Revenue jumped about 10% from the previous year. Comparable sales rose 0.6% for the quarter, driven by what Lowe’s said was spring fulfillment and 15.5% growth in online sales.
“About 60 to 65 percent of our revenue comes from DIY customers, and it’s been a very tough housing market, so for us to have four straight quarters of positive accounts, we were happy with that,” CEO Marvin Ellison told CNBC.
Here’s how the company performed in its fiscal first quarter compared to Wall Street estimates, according to a survey of analysts by LSEG:
- Earnings per share: $3.03 adjusted vs. $2.97 expected
- Income: $23.08 billion versus $22.97 billion expected
Shares of the company rose more than 1% on Wednesday.
For the three months ended May 1, Lowe’s reported net income of $1.63 billion, or $2.90 per share, down slightly from $1.64 billion, or $2.92 per share, a year ago. Excluding one-time factors such as acquisition costs, the company reported adjusted earnings per share of $3.03.
Lowe’s said strength in the appliances, home services and sales to home professionals like contractors sectors also contributed to its performance.
“While DIY demand remains under pressure, we continue to grow our market share in a challenging real estate environment characterized by high interest rates, higher costs and low housing turnover,” Ellison said on a call with analysts Wednesday. “While we expect the overall market to remain stable in 2026, we remain focused on the disciplined execution of our overall real estate strategy, driving continued growth regardless of market conditions.”
Despite soaring gas prices hurting consumer confidence and discretionary spending, Ellison told CNBC that Lowe’s core homeowner customer is largely unaffected by high fuel prices. Yet the combination of gas prices and “broader macroeconomic concerns” is what is driving their sentiment lower, he said.
“The year is unfolding according to our forecast and when we gave our guidance, and we’re just trying to navigate it,” he said.
Ellison said on the analyst call that the company is seeing a K-shaped economic dynamic, in which higher-income consumers are spending more and lower-income consumers are reducing their spending.
“We have a history of performing well, managing our expenses and finding ways to increase our sales, regardless of the macroeconomic situation, and we expect to take share of that this quarter,” he said.
The company also reaffirmed its full-year guidance, projecting total revenue between $92 billion and $94 billion, an increase of between 7 percent and 9 percent from the prior year. He expects comparable sales to be flat, up 2% from last year.
Lowe’s said it expects adjusted earnings per share of between $12.25 and $12.75 for the full year.
These profits come against a backdrop of difficulties in the real estate market and consumer caution in the face of soaring gasoline prices.
“I think overall these are the toughest real estate markets I’ve faced in this industry since the financial crisis,” Ellison said on the call.
He told CNBC that he thinks interest rates need to come down to allow consumers to have more flexibility with their home improvement projects.
“I think the main lever we need is just to lower rates, both 30-year fixed rates and short-term rates,” he said. “When we see that happening, and I think we’re talking about a sustainably sub-6% rate environment, we think that will start to soften that segment.”
Lowe’s executive vice president of merchandising Bill Boltz said on Wednesday’s call that the company’s top professional buyer “stays busy” with repair and maintenance projects.
Company executives said on the call that high oil prices are also putting pressure on the company. Although the impact in the first quarter was minimal, they said the current quarter faced more challenges.
In February, Lowe’s cut about 600 corporate and support positions as the company said it wanted to focus more on its store employees and align its resources.
Earlier this week, Lowe’s rival Home deposit said its major client remained resilient as it reaffirmed its full-year guidance and beat Wall Street expectations. The retailer also said it had requested duty refunds, which it said could help offset rising fuel costs.
Ellison told CNBC that Lowe’s has not publicly revealed whether it has requested duty refunds, but that it is monitoring the situation closely because there is “still a lot to learn.”