Buyers abandon new data from Lowe's - this is why
Consumers move their spending habits and this has an impact on sales.
Spring and summer generally cause a feeling of renewal, the owners choosing to reorganize and reorganize their spaces, or to take projects outdoors in the sun. But this is not exactly what some of the most popular domiciliary renovation retailers In the United States, SAW is performing this year. In fact, new data show that Lowe sales have actually dropped in the last quarter, and the CEO offers its own explanation to explain why. Read more to find out why buyers are currently abandoning Lowe.
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Lowe sales decreased during its last quarter.
In a August 22 Press release , Lowe's Companies, Inc. published the financial results of his second quarter for the 2023 financial year. For the quarter, which ended on August 4, the domiciliary renovation retailer reported $ 25 billion in total sales. But as with many other retailers, this represents a drop in what she saw in the same quarter of last year.
During the second quarter of the 2022 fiscal year, Lowe's reported $ 27.5 billion In total sales, reflecting a 1.6% drop from one year to the next.
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The CEO says consumers are retreating in certain areas.
During a August 22 profit call With analysts, the CEO of Lowe Marvin Ellison Confirmed the drop in sales, noting that consumer spending has become more recently reserved.
"Buyers of the improvement of the house remain cautious with their expenses, in particular discretionary purchases of large tickets," said Ellison.
And during the Goldman Sachs Global Consumer Conference in New York on September 13, the CEO reiterated that consumers take more " prudent approach "To spend large ticket items, Yahoo Finance reported. This is particularly annoying for Lowe's, because the DIY consumer stimulates 75% of his income.
"Whenever this DIY customer becomes careful, especially on large posts [purchases], this affects us in a disproportionate way," said Ellison.
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Buyers move their spending habits elsewhere.
A major change of consumers strikes retailers like Lowe's Hard. Buyers transferred their expenses to "the economy of experience", instead of spending goods.
"We think that the snapshot to date is a bit jerky because ... this DIY customer is not only affected by inflation and in certain respects, but they also invest in more experiences, whether it be the Travel or whether it is concerts and other things that we all re -engage by leaving the pandemic years, "said Ellison at the September 13 conference.
At the same time, the CEO said that it expects this change to consumer expenditure habits is only a "short -term phenomenon" and that things will return to normal in the long term.
"We have no point of view as far as this inflection point occurs, but we expect the pressure to remain for the balance of the year," noted Ellison. "We hope that when this pressure is deleted and the customer regains his confidence, we will be well placed to take stocks because we have made the investments."
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There has been growth in certain areas for the last quarter of Lowe.
Buyers do not immediately give up Lowe. While consumers withdraw on large ticket items, they focus their expenses on "small repair and maintenance projects," Ellison told analysts.
During the call for gains, Bill Boltz , The executive vice-president of Lowe merchandising, explained that the retailer was able to prevent sales from falling much further due to a "stronger spring than expected".
"" Lawn and garden was a remarkable category, "he noted." We have seen an increase in smaller instantaneous gratification projects that improve outdoor spaces at an affordable price, such as landscaping projects and pre-traced plants. ""
According to Boltz, Lowe's has also experienced sales growth in other categories, including rough plumbing, building materials, painting and equipment.
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