Home Depot and Lowe’s quarterly profit drops as customers continue to cut back on home renovations, repairs and DIY projects. The two retail chains have faced financial pressure in recent months, weighed down by a sluggish housing market and continued economic uncertainty.
“We believe that consumer pressure and continued pressure on housing is something that affects the development of the home improvement day,” said Demot CEO Ted Deper in the earnings yesterday (Nov. 18). Lowe’s CEO Marvin Ellison similarly told an analyst today (Nov. 19) that the retailer is facing “soft demand within an uncertain environment.”
In the August-October military quarter, both companies report falling profits. The depot’s revenue was adjusted by 1 percent in the year to $ 3.6 billion from $ 3.65 billion, while the profit of Lowe’s fell about 5 percent to 1.62 billion. Despite the pressure, revenue rose about 3 percent for both companies. Comparable sales, or revenue from stores open at least one year, grew 0.2 percent at Home Depot and 0.4 percent at Lowe’s.
The two sellers are often considered bellwethers for consumer sentiment, because their financial performance often shows how the conditions are similar to the real estate market conditions and the willingness of customers to take on major home improvement projects. Both companies revised their full-year profit forecasts this week, according to an economic analyst. Home Depot noted that it now expects earnings to fall 20 percent, a sharper decline than the previous estimate of 2 percent, and Lowe’s said its full revenue would come in at the lower end of its previous guidance.
Securities tax rates, held above 6 percent, are sought after opportunities for home improvement projects as few buy and sell homes. “What we’re seeing now is very little,” Decker said. Between January and September, only 18 new homes were sold, marking the lowest number in at least a decade, according to a report from Redfin.
Consumer strain has been exacerbated by policies such as the Trump Administration’s tariffs, which have pushed prices higher. Home Depot’s prices decreased in August due to its reliance on component imports for nearly half of its inventory. Lowe’s, which sources 40 percent of its products overseas, also raised prices in the quarter.
Recent declines in severe weather have led to weak demand for roofing, energy production and plywood. Roofing shipments, in particular, fell by “double digits” this year due to the absence of hurricanes, Home Depot said.
But physical properties alone do not explain the decline. Decker said the broader economic uncertainty is fraught with cost of living, layoffs and job concerns — and it’s also banking. “That’s why we don’t see an uptick in that temporary fix in the business,” said the CEO. Home Depot’s stock is down nearly 1 percent.
Lowe’s, however, struck a more optimistic note, revealing strength in categories such as Windows, doors,
