Lowe’s provides downbeat annual forecasts as customers defer costly home remodels

By Savyata Mishra

Feb 25 (Reuters) – Lowe’s Cos forecast full-year sales and profit below Wall Street estimates on Wednesday, a more cautious projection than larger rival Home Depot and a sign the retailer expects consumer spending to stay muted.

Shares of the company were down nearly 3% in early trading.

Lowe’s has wrestled with persistent pressure on its do-it-yourself (DIY) business, as households pause big-ticket upgrades such as kitchen remodels and flooring installation while awaiting clearer signals on the labor market, mortgage rates and the broader economy.

“While the housing macro remains pressured, we are focused on directing what is within our control, which includes our ongoing productivity initiatives,” said Lowe’s CEO Marvin Ellison.

In a bid to protect its margins, the company has been cutting jobs and streamlining its operations.

Home Depot maintained its annual forecast for comparable‑sales growth of up to 2% and as much as a 4% increase in earnings per share on Tuesday, while executives warned that the effects of a frozen housing market are likely to persist into 2026.

Compared to its rival, Lowe’s is more reliant on DIY spending, though in recent months it has bulked up its Pro category through deals.

Economic and tariff uncertainty triggered cautious updates from other U.S. retailers, as off‑price chain TJX issued a muted annual sales and profit outlook and Steven Madden withheld its 2026 profit forecast – in early signs of the fallout from the latest policy shifts.

HOUSING MARKET DRAGS

Lowe’s forecast 2026 comparable sales to range between flat and up 2%, largely below analysts’ average expectation of a 2% rise, according to data compiled by LSEG.

It projected adjusted earnings per share in the range of $12.25 to $12.75, compared with expectations of $12.95.

“Investors appear to have focused on the tempered near-term view rather than the operational strength…,” said Bryan Hayes, stock strategist at Zacks Investment Research.

U.S. existing home sales tumbled to the lowest level in more than two years in January as falling inventory raised house prices, highlighting a housing market constrained by higher borrowing costs and tight inventory.

Same-store sales at Lowe’s rose 1.3% in the fourth quarter – the best since the third quarter of 2022 – beating expectations. Its adjusted profit of $1.98 per share surpassed estimates of $1.94.

(Reporting by Savyata Mishra in Bengaluru; Editing by Sriraj Kalluvila)