(Reuters) – Lowe’s lowered its annual profit and comparable sales forecasts on Tuesday, as hopes of a recovery in big-ticket home improvement projects turn dim in the face of cautious consumer spending.
Higher borrowing and mortgage rates have led to subdued demand for new homes — a factor that weighed on sales at Lowe’s and Home Depot.
Placer.ai data showed that fewer new home sales in May and June pressured store traffic for the home improvement companies.
Home Depot also forecast a decline in annual earnings and a bigger drop in annual comparable sales, signaling that revival of consumer demand for pricier goods such as home improvement equipment remains tricky.
Lowe’s now expects full-year adjusted earnings per share of about $11.70 to $11.90, compared with its prior forecast of about $12.00 to $12.30.
The company expects comparable sales for 2024 to fall between 3.5% and 4%, compared with its earlier forecast of a 2% to 3% drop.
Shares of the company were down about 1% in premarket trading. They were up about 9% this year as of last close.
(Reporting by Juveira Tabassum; Editing by Shinjini Ganguli)
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