By Deborah Mary Sophia
(Reuters) -Lowe’s Cos on Tuesday joined larger rival Home Depot in signaling a slower recovery in the home-improvement market as consumers remain tight-fisted against the backdrop of sticky inflation and uncertainty over the economy’s prospects.
Investors were betting on a more normalized U.S. home improvement environment this year after 2023 was dubbed a transition period as the industry digested the outsized gains from the pandemic.
Persistent inflation and a stagnant housing market were forcing consumers to hold out on big-ticket purchases, CEO Marvin Ellison said on a post-earnings call.
“Unfortunately, it’s still very difficult to predict” when home improvement demand will inflect, Ellison said.
The company is particularly squeezed as Do-It-Yourself (DIY) customers, who generate 75% of its total sales, are allocating fewer dollars to large-scale home remodeling and cutting back on discretionary items as they take up only necessary repair work.
Lowe’s forecast comparable sales to be down 2% to 3% in fiscal 2024, while analysts were expecting a 1.13% drop.
“We expect comp sales to improve (in the second half) … To be clear, we are not forecasting an improvement in demand trends this year. Rather, the compares are easier in the second half,” CFO Brandon Sink said.
The company is banking on its new DIY loyalty program, expected to roll out nationwide in March, to help draw demand from more value-sensitive customers.
The No.2 U.S. home-improvement chain…
