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Economy
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Challenges Ahead for Home Improvement Retailers
2024-08-21 05:50:08
Business
Finance

Challenges Ahead for Home Improvement Retailers

Lowe's reports a 5.5% YoY sales drop to $23.59B, reducing full-year outlook due to decreased discretionary spending on higher prices. The retailer's shares fell 0.3% pre-market.

Target aims for top-line growth after a resilient performance amidst market volatility. Competitor Macy's to report Q2 earnings after rejecting a $6.9 billion buyout offer, implementing a new strategy under CEO Tony Spring.

Home Depot faces a 3.6% sales decline as customers pause home improvement projects amidst high rates and inflation. The overall trend signals challenges for the retail sector amid economic pressures and shifting consumer sentiment.

Related news on that topic:

Consumer Spending Outlook: Mixed Picture for US Retailers

Despite a rise in retail sales in July, analysts suggest that the US consumer is weakening, with most retailers expected to lower their guidance for late 2024. Inflation, particularly in shelter costs, is putting a strain on consumers, leading to a potential boost in housing liquidity if the Fed cuts interest rates. Walmart's strong performance is attributed to market share gains rather than consumer strength. However, Home Depot's results indicate a pullback in discretionary spending. July sales were likely boosted by Prime Day promotions at Amazon, Walmart, and Target, but June experienced weak retail growth. Lowe's also reported weak sales and cut its outlook due to reduced discretionary home spending. Despite these challenges, Walmart's CEO remains optimistic about the stable consumer. The ongoing Q2 2024 earnings season has shown positive blended EPS growth for the S&P 500, but only 60% of companies have beaten revenue estimates. Overall, the consumer is feeling the impact of high prices and inflation, leading to cautious spending decisions.

Lowe's Q2 Earnings Beat Expectations, but Revenue Misses

Lowe's Q2 earnings had a Non-GAAP EPS of $4.10, beating expectations by $0.10, but the company's revenue of $23.59B missed by $370M. Same-store sales dropped 5.1%, more than expected, due to pressure on big-ticket projects. Lowe's lowered its 2024 outlook, expecting a 3.5%-4% drop in same-store sales. Despite the challenges, Lowe's is investing in technology and innovation, and is prepared to take advantage of the recovery in the DIY market. Premier also reported positive Q4 earnings, with Non-GAAP EPS of $0.69 beating expectations by $0.20, and revenue of $350.27M beating by $37.06M. Macy's is set to report Q2 earnings, with expectations of $0.30 EPS and $5.05B in revenue. Kingsoft Cloud and Medtronic also reported better-than-expected earnings, with Kingsoft Cloud reporting revenue of $260.32M, beating by $4.72M, and Medtronic reporting revenue of $8B, beating by $100M.

Read 3 more recent news on this topic

The press radar on this topic:

The Street
21. August 2024 um 17:20

Home Depot CEO sounds the alarm on a growing issue TheStreet Daily Newsletter

Economy
Home Depot CEO Ted Decker said customers taking a "pause" on home improvement projects due to higher interest rates, inflation eroding disposable income; 3.6% decline in comparable store sales, 40% drop in housing turnover indicate weakening consumer demand.
Yahoo!
20. August 2024 um 12:33

Lowe's Reports Weak Sales, Cuts Outlook as Consumers Scale Back

Economy
Finance
Lowe's Q2 sales fell 5.5% YoY to $23.59B, missing; Home Depot, Lowe's impacted by reduced discretionary home spending on higher prices, rates. Lowe's lowered full-year sales, profit outlook on DIY, weather pressures; offset by digital, pro sales. JPMorgan positive on Lowe's margins. Comparable sales fell 5.1% Q2, expected down 3.5-4% FY. Lowe's shares down 0.3% pre-market.
The Street
22. August 2024 um 14:18

Target earnings in focus as Walmart tightens grip on retail spending TheStreet Daily Newsletter

Economy
Finance
Target CEO Brian Cornell has told investors that the company expects to return to top-line growth starting in the second quarter, as it builds on the remarkable gains seen over time. Cornell has stated that like the U.S. consumer, Target's team has shown remarkable resilience during an extended period of exceptional volatility.
Yahoo!
20. August 2024 um 18:23

Macy's to report Q2 earnings as it doubles down on new strategy, ends buyout deal discussions

Macy's will report Q2 earnings after rejecting a $6.9 billion buyout offer. The company is implementing a turnaround plan under new CEO Tony Spring, including store closures and digital investments, as it faces declining sales and market share. Macy's recent foot traffic has improved, likely due to back-to-school shopping, but it faces competition from discount retailers like TJX Companies. Citi analyst Paul Lejuez expects Macy's to beat Q2 expectations but not raise guidance due to the macro..
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