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Lowe's Stock Slips as Cautious Outlook Highlights DIY Spending Pressure

• Lowe's stock fell 3% premarket after the company issued a cautious outlook, citing significant pressure on discretionary DIY consumer spending. • Second-quarter revenue of $26 billion slightly missed estimates, though adjusted EPS of $4.27, aided by tariff refunds, exceeded expectations. • Comparable sales grew a tepid 0.2%, below forecasts, as strength in Pro and online sales was offset by weak DIY demand, which represents 60-65% of revenue. • The retailer lowered its full-year sales and earnings guidance, now expecting approximately $92 billion in sales and EPS of $12.25, at the low end of prior ranges.

Lowe's Companies Inc. saw its shares decline in premarket trading Wednesday after the home improvement retail giant presented a more guarded financial outlook, pointing to sustained "pressure" within the critical do-it-yourself consumer segment. The cautious tone underscores broader sector concerns about consumer spending resilience amid challenging housing market conditions. For its fiscal second quarter, Lowe's reported revenue of $26 billion, narrowly missing the $26.1 billion consensus estimate. Adjusted earnings per share came in at $4.27, surpassing the anticipated $4.22, a figure that included an $0.11 per share benefit from IEEPA tariff refunds. The company achieved a fifth consecutive quarter of positive comparable sales, albeit at a modest 0.2% growth rate, which fell short of the 0.7% analysts expected. CEO Marvin Ellison attributed this performance to "sustained growth in Pro, Online and Home Services," which was "partially offset by persistent DIY macro pressures." The headwinds facing the DIY customer, who historically constitutes 60% to 65% of Lowe's revenue, are pronounced. Management cited a "tough housing backdrop," a sentiment echoed by Home Depot CFO Richard McPhail, who recently described housing conditions as "frozen" with 30-year mortgage rates hovering near 6.7%. This environment discourages the larger discretionary projects typically undertaken by homeowners. In response, Lowe's has revised its full-year guidance downward. The company now expects total sales of approximately $92 billion for 2026, down from the top end of its prior $92 billion to $94 billion range, and forecasts flat comparable sales versus a previous expectation for up to 2% growth. Adjusted diluted earnings per share are projected to be around $12.25, also the low end of the earlier $12.25 to $12.75 forecast. The updated outlook signals a strategic pivot, with Lowe's increasingly reliant on its professional contractor business, digital platforms, and installation services to navigate a period of consumer caution. While these segments show resilience, the company's near-term trajectory remains tightly coupled to a recovery in the broader housing market and a rebound in DIY spending confidence.

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