Lowe’s 3Q Sales Fall 7.4% on Slumping DIY - Modern Distribution Management

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Lowe’s 3Q Sales Fall 7.4% on Slumping DIY

Based on lower-than-expected DIY sales, partially offset by positive Pro customer comp sales, Lowe's updated its outlook for the year.
Source: Lowe's

On Nov. 21, Lowe’s Companies reported third-quarter sales were down 7.4% to $20.5 billion, a slump attributed to a greater-than-expected pullback in Do-It-Yourself discretionary spending, but partially offset by positive Pro customer comp sales.

The North Carolina-based retailer reported third-quarter net earnings of $1.8 billion and diluted earnings per share of $3.06 for the quarter ended Nov. 3, 2023, compared to diluted EPS of $0.25 in the 3Q 2022.

“Given our 75% DIY mix, the DIY pressure disproportionately impacted our third quarter comp performance,” Lowe’s Chairman, President and CEO Marvin Ellison said. “At the same time, our investments in Pro continue to resonate, resulting in positive Pro comps again this quarter.”

Despite pressure on and caution in the Pro market, Ellison has had a positive perspective on the segment this year. During the 2Q earning report, he said the company’s strategic plan has continued to drive sales growth in the Pro segment, which is largely made up of contractors typically served by wholesale distributors. Check out this deep dive into Lowe’s Pro-focused initiatives on MDM Premium. 

DIY and Pro sales figures were not released with the earnings.

Lowe’s Updated 2023 Guidance

Based on lower-than-expected DIY sales, the company is updating its outlook for the operating results of full year 2023:

  • Total sales of approximately $86 billion (previously $87 – $89 billion)
  • Comparable sales expected to be down approximately -5% as compared to prior year (previously down -2% to -4%)
  • Adjusted operating income as a percentage of sales (adjusted operating margin) of approximately 13.3% (previously 13.4% to 13.6%)
  • Interest expense of approximately $1.4 billion (previously $1.5 billion)
  • Adjusted effective income tax rate of approximately 25%
  • Adjusted diluted earnings per share of approximately $13.00 (previously $13.20 to $13.60)
  • Capital expenditures of up to $2 billion

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