Lowe's cuts outlook on weaker DIY demand

The North Carolina-based firm said net sales in the three months to 5 May fell to $22.3bn from $23.7bn a year previously, while comparable sales declined 4.3%, hit by unfavourable weather, higher-than-expected lumber deflation and weaker DIY sales. Analysts had been looking for a fall of around 3.2%.

Adjusted diluted earnings per share were $3.67, a 5% increase on the previous year and higher than consensus for $3.44 per share.

But looking to the rest of the year, Lowe’s - which generates around 75% of its sales through the home improvement sector - said it expected lumber deflation and weaker DIY demand to continue.

Marvin Ellison, chief executive, said: "We are pleased with the performance of our business, despite record lumber deflation and unfavourable spring weather.

"Although we delivered positive comparable sales in pro and online for the first quarter, we are updating our full-year outlook to reflect softer-than-expected consumer demand for discretionary purchases.

"We remain optimistic about the medium-to-long term outlook for home improvement and our ability to continue to grow market share through our total home strategy."

The retailer is now expecting total annual sales of between $87bn and $89bn in the current year, and adjusted diluted EPS of between $13.20 to $13.60. Previously, Lowe’s had guided for total sales between $88bn and $90bn and EPS between $13.60 and $14.00.

As at 1245 BST, Lowe's New York-listed shares were off nearly 2% in pre-market trading.