Lowe's Q1 beat overshadowed by DIY sales slump

Shares of Lowe's (LOW) are trading lower on Tuesday, despite the company's better-than-expected first quarter earnings. Lowe's cited a pullback among consumers in the do-it-yourself (DIY) segment, with sales in that category declining.

Yahoo Finance's Brooke DiPalma delves into the details of Lowe's earnings report, providing insights into the initiatives the company is taking to navigate the current landscape of a cautious consumer.

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This post was written by Angel Smith

Video transcript

Lowe's also reported what?

Tell us there was the take away.

Yeah, the company also beat earnings but once again, low expectations there.

So a similar saga and they're also citing a cautious consumer there on the call.

The CFO there said that consumers are digesting and adjusting to monetary tightening and they're kind of remaining on the sidelines.

Now, similar to what we heard at Home Depot that Diy that everyday customers pulling back did see seam source sales fall 4.1% and the Diy customer actually makes up a larger customer base for Lowe's than it does for Home Depot.

It's about 75% of Lowe's shopper base.

And so the pro business on the other hand, think strength and roofing concrete and block drywall installation, that business offset that decline in the Diy customer.

And online sales also saw city of com sales for Lowe's.

They did announce that they are really investing in the Diy Loyalty program and they also expanded their same day delivery with doordash and they also have a partnership with Instacart.

So they did see online sales do well for them.

The shares are down, shares are down off of that cautious consumer right now.

Exactly.

So, it's interesting, I guess it's just all an expect expectations game because in the case of Macy's, it was sort of similar in terms of what they're expecting and what they're seeing and the temperature from the customer, the Lowe's kind of saying the same thing and getting punished more for it.

But I guess it's, it's relative to expectations of what the stocks have done.

Yeah.

What Lowe's shares I should point out down now about 2.5% as you make your way to the close.

But really uh Lowe's customer sort of says we have all the uh capability.

We're just waiting for that customer to be able to, to come back to the store, be able to have that extra cash in hand to lean back into that home renovation.

He said that the customers are still looking for experiences over doing those diy home rental pro projects and also the housing market.

That's really what they're waiting on it that to rebound as well.

I wonder too Brooke how much is like pandemic still hangover?

I mean, how many people, right.

Remodeled.

They did that, they did all that, right?

And now you can still see.

Yeah, and a lot of people did buy new homes during the pandemic and they really invested in those homes that they bought.

So now once again, as I just said, Lowe's really waiting on that customer that new customer to then buy a house and then have the money, you know, thinking of interest rates, thinking about how much more customers are paying these days for housing.

They just at the, at the end of the day, even if they're getting that house, they simply don't have the money to put back into it.

Right.

All right.

Thanks a lot.

Appreciate it, Brooke.