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The company, which brings in 75% of its sales from DIY consumers, however, said spending in the segment was improving.
Shares rose 1% premarket after Lowe’s (NYSE:LOW) said quarterly earnings beat estimates on cost control measures and steady demand from builders, and its per-share earnings for the year would be toward the top end of its prior range.
Lowe’s has rolled out more self-checkout terminals and adopted a payroll model, allowing it to lower labor hours and costs, at a time when retailers are striving to protect their bottomline.
“Operating expense performance was much better than expected, which speaks to Lowe’s commitment/flexibility to manage expenses,” J.P. Morgan analyst Christopher Horvers said.
Lowe’s per-share profit was $4.67 for the second quarter ended July 29, above estimates of $4.58. Selling, general and administrative expenses as a percentage of sales were 16.2%, compared with 17% last year.
However, a shorter spring and shrinking non-essential spending hurt sales. Lowe’s reported a 0.3% drop in comparable sales, while analysts were expecting a 2.4% increase, according to Refinitiv IBES data.
The downbeat sales figures are in contrast to better-than-expected results from bigger rival Home Depot Inc (NYSE:HD), but Wall Street analysts said Lowe’s results were better than feared.
Compared to Lowe’s, DIY customers account for roughly half of the business at Home Depot.
Lowe’s sales to professionals including builders and contractors, who still have a healthy backlog of remodeling work, jumped 13%, cushioning some of the DIY hit.
The company said its 2022 sales would be toward the bottom end of its range of $97 billion to $99 billion.
