Lowe’s beats sales estimates, plans to stay ‘price competitive’

Home improvement retailer Lowe’s posted a smaller-than-expected drop in first-quarter sales on Wednesday and said it plans to keep its pricing competitive, without ruling out the possibility of price hikes on some items due to tariffs.

In a conference call on Wednesday, CEO Marvin Ellison said Lowe’s is “not donating share to any competitor by sitting back and not being price competitive.”

The comments were in contrast to those of competitor Home Depot, which on Tuesday vowed to keep prices steady, but the companies maintained their annual forecasts.

Lowe’s CFO Brandon Sink said he expects profit margins to remain flat this fiscal year, noting that price impacts from tariffs would be concentrated in the second half of the year due to the company’s practice of selling older stock first.

Prices are a key topic in retail in the wake of President Trump’s imposition of big tariffs on key trading partners. The levies could even rise further in the coming months.

Walmart last week warned that shoppers could soon face higher prices due to the U.S. tariffs, while Target lowered its annual sales and profit forecasts on Wednesday, citing weakening demand among shoppers.

Meanwhile, Lowe’s’ primary rival, Atlanta-based Home Depot, bet on its diversified supply chain and a strong hold on professional customers like contractors to mitigate tariff impact.

But company executives admitted that if tariffs on certain items became untenable, they could disappear from shelves altogether.

Sales at Home Depot and Lowe’s have been hurt by tariff fears, which have contributed to a plunge in consumer sentiment and discouraged large-scale renovation projects that typically require customers to take out new loans.

Still, Lowe’s reported a smaller-than-expected drop in first-quarter comparable sales on Wednesday, helped by steady demand from construction professionals.

Ellison said strategic investments in its stores and technology helped it navigate better amid economic uncertainty and a slow housing market.

Last month, the company acquired Artisan Design for $1.33 billion to improve its focus on demand from professional home builders and property managers.

Lowe’s has also diversified its supply chain and added more local suppliers to help it mitigate the impact from U.S. tariffs.

About 60% of Lowe’s’ purchase volume comes from the U.S., Ellison said on the call, while 20% is sourced from China.

Bill Boltz, Lowe’s’ executive vice president of merchandising, said that items imported from China – the country most in Trump’s crosshairs — include holiday trees, ceiling fans, small appliances and tools.

The company expects 2025 comparable sales to be flat to 1% higher and earnings per share in the range of $12.15 to $12.40.

“Lowe’s guidance is in-line with current market expectations, which has to be seen as a net positive in this environment,” said Sheraz Mian, director of research at Zacks Investment Research.

The company reported a 1.7% drop in same-store sales for the quarter ended May 2, compared with analysts’ average estimate of a 2% decline, according to data compiled by LSEG. It earned $2.92 per share, above estimates of $2.87.