House enchancment retailer Lowe’s posted a smaller-than-expected drop in first-quarter gross sales on Wednesday and stated it plans to maintain its pricing aggressive, with out ruling out the potential for value hikes on some gadgets resulting from tariffs.
In a convention name on Wednesday, CEO Marvin Ellison stated Lowe’s is “not donating share to any competitor by sitting back and not being price competitive.”
The feedback have been in distinction to these of competitor House Depot, which on Tuesday vowed to preserve costs regular, however the firms maintained their annual forecasts.
Lowe’s CFO Brandon Sink stated he expects revenue margins to stay flat this fiscal 12 months, noting that value impacts from tariffs can be concentrated within the second half of the 12 months as a result of firm’s apply of promoting older inventory first.
Costs are a key matter in retail within the wake of President Trump’s imposition of huge tariffs on key buying and selling companions. The levies may even rise additional within the coming months.
Walmart final week warned that customers may quickly face greater costs as a result of U.S. tariffs, whereas Goal lowered its annual gross sales and revenue forecasts on Wednesday, citing weakening demand amongst customers.
In the meantime, Lowe’s’ main rival, Atlanta-based House Depot, wager on its diversified provide chain and a robust maintain on skilled clients like contractors to mitigate tariff impression.
However firm executives admitted that if tariffs on sure gadgets turned untenable, they might disappear from cabinets altogether.
Gross sales at House Depot and Lowe’s have been harm by tariff fears, which have contributed to a plunge in client sentiment and discouraged large-scale renovation tasks that sometimes require clients to take out new loans.
Nonetheless, Lowe’s reported a smaller-than-expected drop in first-quarter comparable gross sales on Wednesday, helped by regular demand from building professionals.
Ellison stated strategic investments in its shops and expertise helped it navigate higher amid financial uncertainty and a sluggish housing market.
Final month, the corporate acquired Artisan Design for $1.33 billion to enhance its give attention to demand from skilled residence builders and property managers.
Lowe’s has additionally diversified its provide chain and added extra native suppliers to assist it mitigate the impression from U.S. tariffs.
About 60% of Lowe’s’ buy quantity comes from the U.S., Ellison stated on the decision, whereas 20% is sourced from China.
Invoice Boltz, Lowe’s’ government vp of merchandising, stated that gadgets imported from China – the nation most in Trump’s crosshairs — embody vacation bushes, ceiling followers, small home equipment and instruments.
The corporate expects 2025 comparable gross sales to be flat to 1% greater and earnings per share within the vary of $12.15 to $12.40.
“Lowe’s guidance is in-line with current market expectations, which has to be seen as a net positive in this environment,” stated Sheraz Mian, director of analysis at Zacks Funding Analysis.
The corporate reported a 1.7% drop in same-store gross sales for the quarter ended Could 2, in contrast with analysts’ common estimate of a 2% decline, in line with knowledge compiled by LSEG. It earned $2.92 per share, above estimates of $2.87.
