Lowe's shares fell Wednesday after the company's sales outlook disappointed investors and raised concerns that the pandemic-fueled boom in do-it-yourself and decorating projects is cooling.
Shares were down nearly 2% in premarket trading.
During an analyst meeting, Chief Financial Officer Dave Denton said that Lowe's is preparing for a "modest sector pullback in 2022" when compared with a year of such high demand and sales fueled by government stimulus. Still, he said, the retailer anticipates its sales will outpace competitors and it will win more market share with home professionals.
Lowe's sales have gotten a lift from Americans who fixed up their yards, tackled DIY projects and redecorated rooms during the pandemic. Even as some of those "nesting trends" recede, however, its sales have been buoyed by the strong real estate market.
But for fiscal 2022, Lowe's said it anticipates same-store sales could drop by as much as 3% or be roughly flat with this year. Total sales will range from $94 billion to $97 billion in the upcoming fiscal year. That fell below analysts' estimates of $97.64 billion, according to Refinitiv.
Lowe's is estimating sales of about $95 billion for this fiscal year, which is one week shorter than next fiscal year.
For fiscal 2022, Lowe's expects to earn between $12.25 and $13.00 per share. On average, analysts were expecting Lowe's to earn $12.93 per share.
CEO Marvin Ellison said the company still has plenty of growth drivers for the coming year. Among them, he said it is launching new private brands, expanding its e-commerce business and catering to baby boomers by becoming a one-stop shop for supplies to help them age in their own homes. Together, he said, those will "expand our share of wallet with both the DIY and pro customers."
"We're making targeted investments to win with the DIY customer across generations of homeowners, across geographies and across a spectrum of tastes and styles," he said. "We're also investing in the pro to ensure that we have a consistent, competitive offering for this busy customer."
The company said it plans to buy back about $12 billion in shares both this year and next year.
As of Tuesday's close, Lowe's shares are up 57% this year. Shares closed Tuesday at $252.46, down 1.86%. The company's market value is $170.10 billion.
This story is developing. Please check back for updates.
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