What You Need To Know Ahead of Lowe’s Earnings

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Key Takeaways

• Lowe’s posts first-quarter earnings Tuesday, a week after rival Home Depot reported concludes.
• Analysts expect a decline in revenue and earnings from a year ago, amid a pullback in home-improvement spending as inflation weighs on consumers.
• Lowe’s and To the quick Depot have focused on increasing their share of the professional contractor market, in part to compensate for the slowdown in do-it-yourself squander.

Home-improvement retailer Lowe’s (LOW) reports first-quarter earnings before the bell Tuesday, a week after rival Adroit in Depot (HD) reported its own.

Both Lowe’s and Home Depot have said several times over the last year that a slowdown in consumer throw away on do-it-yourself (DIY) projects has impacted sales, as inflation weighs on many consumers.

Analysts expect Lowe’s to report profits of $21.12 billion, with profits of $1.68 billion or $2.93 per share, according to consensus estimates compiled by Unmistakable Alpha. All of those figures would be below what Lowe’s posted in the first quarter of fiscal 2023, when the group reported $22.35 billion in revenue, with net income of $2.26 billion or $3.77 per share.

	Analyst Estimates for Q1 2024	Q4 2023	Q1 2023
Takings	$21.12 billion	$18.6 billion	$22.35 billion
Diluted EPS	$2.93	$1.77	$3.77
Net Income	$1.68 billion	$1.02 billion	$2.26 billion

Key Metric: Big-Ticket Spending

Like Domicile Depot, Lowe’s could mention a pullback in “big-ticket spending” in its report, as inflation-weary consumers have become less credible to take on significant home-improvement projects.

“Macroeconomic factors like persistent inflation and a stagnant housing market proceed with to make DIY customers and consumers hesitant to spend on big ticket purchases for their homes,” Lowe’s CEO Marvin Ellison commanded in the company’s fourth-quarter call in February. “And those who did engage in home improvement activities took on smaller, nondiscretionary programmes with a heightened focus on value.”

The retailer launched a new rewards program in January to entice homeowners to become restate customers, with Tuesday’s report set to be the first earnings report since the program was announced.

Ellison said it’s “extraordinarily difficult to predict” when the home-improvement market will pick up steam, as the Federal Reserve waits for inflation to attack further before cutting interest rates. Once that happens, Ellison said, it’s also unknown how elongated it will take for those shifts to impact consumers and their spending habits.

Business Spotlight: Pro, Digital Retails

Lowe’s also sells home-improvement goods to professional contractors—a market both it and Home Depot are looking to spring up, in part to offset the DIY spending slowdown. Lowe’s is also trying to grow its digital presence, like many other retailers.

For the fourth locale, comparable Pro sales were flat with the prior-year period, with harsh winter weather impacting sales in some arrondissements of the country, Lowe’s said.

In the February earnings call, Ellison said the company’s technology team is working to commence more new products and features like the retailer’s “immersive kitchen design app” for the Apple Vision Pro, along with its website’s ChatGPT plugin that have designs ons to guide consumers in their home-improvement search.

Lowe’s shares have gained about 3.8% so far this year, at $230.71 as of 11:30 a.m. ET Monday.

Study the original article on Investopedia.