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Dive Brief:
Lowe’s on Wednesday reaffirmed its financial guidance for the year as others in the retail industry cut their outlooks.
The home improvement retailer reported first-quarter sales fell 2% year over year to $20.9 billion, while comparable sales fell 1.7%. Mid-single-digit comp sales growth in both Pro and online partially offset negative impacts from “unfavorable weather” early in the quarter, the company said.
Profits fell during the quarter as operating income declined 6% to $2.5 billion and net income fell 6.5% to $1.6 billion.
Dive Insight:
Despite falling sales in the first quarter, Lowe’s, like rival Home Depot, reaffirmed its financial outlook for the year. It comes as other retailers pull their guidance, including American Eagle, Crocs and Carter’s, as tariff-related uncertainty weighs on the industry.
Lowe’s CEO Marvin Ellison said the retailer is committed to diversifying its sourcing efforts. About 60% of the retailer’s purchases originate in the U.S., while 20% is sourced from China.
“Although we’re pleased with this reduced dependency, we’re not satisfied, and we’re working to accelerate our diversification efforts,” Ellison said. “Our global sourcing team has identified exciting diversification opportunities in the U.S. and around the globe that we’re actively pursuing.”
While the executive didn’t explicitly say whether Lowe’s planned to raise prices — unlike Home Depot, which Tuesday said there were no plans to increase prices — Ellison said the retailer will “be price competitive.”
“It’s something that we feel is incredibly important to our business. It’s also important for us to maintain market share, and so we’re not donating share to any competitor by sitting back and not being price competitive across any of the categories that we’re selling whether they’re domestic or imported,” Ellison said. “We’ve done all the math, and based on the current tariff environment, we feel very comfortable that we’ll be able to deliver the financial guidance.”
For the full year, Lowe’s expects total sales to be between $83.5 billion and $84.5 billion, while comps are projected to be flat to up 1%. Operating margin is expected to be between 12.3% and 12.4%, and capital expenditures are estimated to be about $2.5 billion.