Lowe's cuts annual forecasts on weak home improvement demand

(Reuters) -Lowe's cut its annual profit and sales forecasts on Tuesday, joining bigger rival Home Depot (NYSE:HD ) in issuing bleak projections as economic concerns keep consumers from splurging on pricy home improvements.

Higher borrowing and mortgage rates have led to subdued demand for new homes — a factor that weighed on sales at Lowe's (NYSE:LOW ) and Home Depot.

Placer.ai data showed that fewer new home sales in May and June pressured store traffic for the home improvement companies.

Home Depot also forecast a decline in annual profit and a bigger drop in annual comparable sales last week, signaling that revival of consumer demand would take a while.

Unusually warm weather also dented sales for both home improvement companies as consumers put off renovation projects for their lawns and homes this spring season.

Lowe's second-quarter comparable sales fell 5.1%, more than analysts' expectation of a 4.11% drop, per LSEG data.

The company now expects full-year adjusted earnings per share of about $11.70 to $11.90, down from about $12.00 to $12.30.



It sees a 3.5% to 4% drop in comparable sales for 2024, compared with its earlier forecast of a 2% to 3% drop.

Shares of the company were down marginally in premarket trading.

Source: Investing.com