by Home improvement retailer said drop was driven by continued pressure in DIY, bigger-ticket discretionary spending
MOORESVILLE, N.C. — Home improvement retailer Lowe’s Cos. reported a 5.1% drop in sales for its second quarter ended Aug. 2 and net earnings of $2.4 billion.
Net sales totaled $23.6 billion, compared to sales of $25 billion the same period last year. Net earnings of $2.4 billion, or $4.17 per share, were down slightly from net earnings of $2.7 billion or $4.56 per share the same period last year.
The company said that the sales decrease was driven by continued pressure in DIY, bigger-ticket discretionary spending combined with unfavorable weather that adversely impacted sales in seasonal and other outdoor categories. This was partially offset by positive comparable sales in its Pro and online business, the online portion of which includes the sale of furniture and a wide range of home improvement products.
For the quarter, the company also reported operating income of $3.4 billion, or 14.6% of sales, compared with $3.9 billion, or 15.6% of sales, the same period last year. Its gross margin was $7.9 billion, or 33.47% compared with $8.4 billion, or 33.6% the same period last year.
“The company delivered strong operating performance and improved customer service despite a challenging macroeconomic backdrop, especially for the homeowner,” said Marvin R. Ellison, chairman, president and chief executive officer. “At the same time, we continue to build momentum with our Total Home strategy reflected by our mid-single-digit positive comps with the Pro customer this quarter. As we look ahead, we are confident that we are making the right long-term investments to take share when the market recovers. I’d like to extend my appreciation to our dedicated frontline associates who remain committed to serving our customers.”
For the full first half, the company reported net sales of $45 billion, down 5% from $47.3 billion in the first half of last year. Net earnings totaled $4.1 billion, or $9.20 per share, compared with $4.9 billion, or $10.43 per share, the same period last year.
It reported first-half operating income of $6.1 billion, or 13.6% of sales, compared with $7.2 billion, or 15.2% of sales, the same period in 2023. Its gross margin was $15 billion, or 33.34% of sales, compared with $16 billion, or 33.7% of sales.
The retailer operated 1,746 stores as of Aug. 2, which represent a combined 194.9 million square feet of floor space. Ranking at No. 30 on Home News Now’s 125 Furniture & Bedding Retailers, the company had an estimated $700 million in sales in the furniture and bedding segment last year.
Much of this is sold through its website, which carries a wide mix of case goods, bedding and upholstery, as well as home accents and decorative accessories. Orders can be placed online and either delivered to the consumer’s home or picked up in person at their local store.
In addition to its quarterly results, the company provided a full-year outlook for 2024 that included the following highlights:
+ Total sales are estimated between $82.7 billion and $83.2 billion, compared to $84 billion to $85 billion previously.
+ Comparable store sales are expected to be down between 3.5% and 4% compared to the year before. Previous guidance had store sales down 2% to 3%.
+ Estimated adjusted operating income as a percentage of sales is between 12.4% and 12.5%, compared to 12.6% to 12.7%.
+ The company anticipates capital expenditures of $2 billion.
+ It anticipates an effective income tax rate of 24.5% compared to 25% previously.
+ It expects adjusted earnings per share to range from $11.7 to $11.90 compared with $12 to $12.30 previously.
