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A pandemic-fueled boom in demand for its products such as kitchen equipment and gardening tools is now fading as household budgets come under pressure from higher prices for everyday essentials.
Americans are also redirecting their attention back to activities such as traveling and vacations and spending more on services rather than goods as they return to a more normal lifestyle after the pandemic.
Visits to Lowe’s (NYSE:LOW) stores dropped 18% in November compared to a year earlier, followed by declines of 12.6% and 11% in December and January, respectively, a report from location analytics firm Placer.ai showed.
Larger rival Home Depot Inc (NYSE:HD) had also last week warned of a moderation in demand this year, while struggling with elevated costs and wage raises amid a tight U.S. labor market.
Lowe’s said on Wednesday it has awarded $220 million in bonuses to its employees, including supply chain supervisors and hourly workers, in the fourth quarter.
Still, the company reported a quarterly adjusted profit of $2.28 per share, topping expectations of $2.21 per share, as expenses tied to shipping and commodities eased.
Lowe’s projected full-year total sales of $88 billion to $90 billion, while analysts on average estimated annual revenue of $90.48 billion, according to Refinitiv data.
The company also forecast 2023 earnings in the range of $13.60 to $14.00 per share, the midpoint of which was slightly ahead of an estimate of $13.79 per share.
Lowe’s reported a 1.5% decline in comparable sales for the three months ended Feb. 3, worse than expectations of a 0.01% drop.
Shares of the company were up marginally at $207.50 in premarket trading.
