The latest financial results from the two big national retailers – Home Depot and Lowe’s – show the business is still soft and may get worse before it gets better.
When the two home improvement giants issued their numbers for their most recent quarters, they were nothing to write home about. But more importantly, they carried with them a warning that things were not going to get any better in the immediate future.
Both Depot and Lowe’s took down their previously forecast projections for their fiscal years, putting them in the flat-to-slightly-down range after earlier saying they thought we could see a bit of an uptick going forward.
In a reverse from the usual pattern, Lowe’s outperformed its larger competitor, posting comp-store sales that were up 0.4 percent, compared to 0.1 percent at Depot. Each of them cited “consumer uncertainty” as a motivating factor in the disappointing numbers but also the dirty little secret of the building trade: there were no hurricanes or other natural disasters this past quarter compared to a year ago and that always impacts categories like roofing, lumber and other things like power generators.
“We believe the consumer uncertainty and continued pressure in housing are disproportionately impacting home improvement demand,” said Depot CEO Ted Decker.
“Affordability and uncertainty in the broader economy continue to weigh on consumer confidence, particularly when it comes to larger discretionary purchases, as borrowing costs have been elevated for longer than originally anticipated,” echoed his CEO counterpart at Lowe’s, Marvin Ellison. But he was a little more optimistic on the state of the consumer. “Overall, the U.S. homeowner remains healthy. Balance sheets are strong, and consumers continue to spend.”
Both retailers mentioned their pro businesses and recent acquisitions in the sector as playing positive roles in their financial results. Lowe’s also credited its new digital MyLowe’s Companion platform as a factor in its results. “When our associates use MyLowe’s Companion to help customers shop in our stores, we are seeing customer satisfaction scores increase 200 basis points.”
