Lowe's cautious outlook sends stock lower as retailer flags 'pressure' in DIY spending

Lowe's stock dipped Wednesday as the home improvement retailer issued a more cautious outlook amid declining DIY consumer spending. In the second quarter, Lowe's reported $26 billion in revenue, slightly below the $26.1 billion forecast by Wall Street. Adjusted earnings per share reached $4.27, surpassing the $4.22 predicted by analysts.

CEO Marvin Ellison attributed Lowe's success to their "total home" strategy, which has driven five straight quarters of positive same-store sales. However, poor Memorial Day weekend weather and competitors leveraging tariff refunds to offer promotions on items like grills and patio furniture pressured Lowe's performance. Despite elevated home equity among customers, Lowe's remains cautious about discretionary spending due to macroeconomic, geopolitical uncertainty, and high fuel prices.

Lowe's expects total sales of $92 billion in 2026, marking a downward revision from the prior range of $92 billion to $94 billion. Analysts also anticipate flat comparable sales compared to last year. Ellison emphasized that while customers remain cautious, they aren't trading down to the cheapest options and still value innovation and luxury.

The company plans to provide an updated segment breakdown at its upcoming analysts and investor conference. Home Depot CFO Richard McPhail echoed Lowe's concerns, noting that housing conditions are stagnant due to persistently high 30-year fixed mortgage rates around 6.7%. Lowe's guidance now aligns with the lower end of the previously expected forecasts, with total sales expected at $92 billion and comparable sales flat year-over-year.

Ellison stressed the importance of investing in the present to prepare for future customer confidence, while also preparing for a promotional strategy focused on added value rather than price-driven discounts.