Lowe’s reports 7.4% decline in Q3 sales

Reduction in DIY discretionary spending reduces revenues to $20.5 billion, compared to $23.5 billion the same period last year

MOORESVILLE, N.C. — Home improvement specialist Lowe’s Cos. reported a 7.4% decline in comparable-store sales for the third quarter ended Nov. 3. Meanwhile, net earnings totaled $1.8 billion, which the company said was the result of a pre-tax asset impairment of $2.1 billion related to its Canadian retail business.

Total sales for the quarter were $20.5 billion, down 7.4% from the $23.5 billion reported for the same period last year. The company said this represented a decline in DIY discretionary spending that was partially offset by positive Pro customer comp sales. Net income totaled $1.8 billion, or $3.06 per share, compared to $154 million, or 25 cents per share, the same period last year.   

For the nine-month period, sales totaled $67.8 billion, down 9.2% from the $74.6 billion reported the first nine months of 2022. Net income was $6.7 billion, or $3.25 per share, compared to $5.5 billion, or $2.90 per share, the same period in 2022.

“In the third quarter, the company delivered strong operating performance and improved customer service despite a greater-than-expected pullback in DIY discretionary spending, particularly in bigger ticket categories,” said Marvin R. Ellison, chairman, president and chief executive officer. “Given our 75% DIY mix, the DIY pressure disproportionately impacted our third-quarter comp performance. At the same time, our investments in Pro continue to resonate, resulting in positive Pro comps again this quarter.”

“As we look ahead, Lowe’s is committed to offering value and convenience this holiday season, helping our customers save time and money,” he added. “I’d like to extend my appreciation to our hardworking front-line associates who continue to elevate the customer experience.”

The home improvement retailer ranked at No. 26 on Home News Now’s 125 Furniture and Bedding Retailers, with estimated furniture and bedding sales of $815 million in 2022. Most of this product is sold on the company’s website, www.lowes.com. Customers can order a wide mix of products on the site and either pick up their purchase at the store or have it delivered to their home.

As part of its quarterly report, the company noted that it opened one new store and three outlet stores during the quarter, operating 1,746 locations representing 194.9 million square feet of retail selling space.

For the full year, it anticipates sales of about $86 billion, which is slightly lower than previous guidance of $87 billion to $89 billion. Comparable-store sales are expected to be down 5% compared to the prior year, compared to prior guidance of a 2% to 4% decrease. It also anticipates an adjusted operating margin of 13.3% compared to previous guidance of 13.4% to 13.6% and interest expenses of about $1.4 billion compared to $1.5 billion previously.

In addition, it anticipates adjusted earnings per share of $13, compared to prior guidance of $13.20 to $13.60 and capital expenditures of up to $2 billion.

Thomas Russell

Home News Now Editor-in-Chief Thomas Russell has covered the furniture industry for 25 years at various daily and weekly consumer and trade publications. He can be reached at tom@homenewsnow.com and at 336-508-4616.

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