Skip to content
HD HD

House Info

  • House Renovation
  • House Design
  • Renovation
  • Bathroom Decoration
  • Home Improvement
HD
HD

House Info

America’s home improvement boom appears to be over

andrean, 09/09/2024


New York
CNN
—

Americans turned into DIY fanatics during the pandemic, beautifying their apartments, homes and condos while they were stuck inside and tired of looking at the same drab interior every day.

But the Covid emergency is over, prices are (much) higher, consumers are growing fearful of a recession and people are spending less at Lowe’s and Home Depot.

Lowe’s on Tuesday lowered its profit and sales outlook for the year, saying consumers were spending less on home improvement. It comes on the heels of rival Home Depot also posting disappointing sales and a sour forecast last week.

“We are updating our full-year outlook to reflect softer-than-expected consumer demand for discretionary purchases,” said Ellison. “We remain optimistic about the medium-to-long-term outlook for home improvement.”

Shares of Lowe’s (LOW) were up 2% Tuesday.

That optimism also hinges on pursuing a different customer, where having rural stores “gives us an opportunity to drive sustainable profit growth due to a much lower expense base,” said Ellison.

The end of a protracted robust investment by homeowners in DIY home improvement projects during the pandemic has forced Lowe’s and rival Home Depot to look for ways to offset a business slowdown.

“Lowe’s is suffering from a case of the home improvement blues,” said retail expert Neil Saunders, managing director at Global Data, in a note Tuesday.

On the consumer side, a slowing housing market is dragging down the number of people undertaking projects, Saunders said.

“This has been unhelpful to Lowe’s, although arguably the burden falls more on Home Depot as movers tend to undertake heavier and more serious DIY, which traditionally favors Lowe’s larger rival,” he said.

Bill Darcy, CEO of the National Kitchen & Bath Association, said homeowners are nervous about the economy. Some have paused large-scale projects, while others are shifting towards smaller, lower-cost projects, he said.

Among the trends he’s observed: Consumers are downgrading brand names in favor of lower prices, they’re using factory-made cabinetry as opposed to custom carpentry and buying less expensive countertops.

Darcy said project completions are beginning to waver. “Year-over-year project completions are up 1.8% in the first quarter of 2023 on a year-over-year basis, decelerating from 6.5% in the fourth quarter of 2022. Consumers are pausing large-scale projects until economic conditions stabilize, ” he said.

Lowe’s said sales at stores open at least a year fell 4.3% in the past quarter. Ellison noted lumber prices have fallen through the floor as supply and demand have finally rebalanced after years of supply chain constraints. The CEO also blamed poor weather, as rain storms in the West weren’t exactly the most favorable conditions for building a shed or installing new soffits.

But discretionary purchases at retailers all over America are saying the same thing in unison: Consumers aren’t spending on stuff they don’t need anymore. Target, Walmart and Home Depot over the past couple weeks all noted that discretionary purchases were down across the board. People are spending more on groceries and other essentials and less on clothes and gutters.

Consumers aren’t completely throwing in the towel yet: Travel spending remains higher. But it seems inflation has finally caught up with America. Prices are 4.9% higher now than they were a year ago, the Labor Department reported earlier this month.

For the first quarter, Lowe’s said overall sales fell 5.5% to $22.3 billion. Profit fell 3% to $2.3 billion.

The company now expects annual sales to come somewhere between $87 billion and $89 billion this year, down from its previous estimate of $88 billion to $90 billion.

At stores open at least a year, Lowe’s now predicts sales will fall as much as 4%. It had previously expected sales to be flat to down 2%. And Lowe’s lowered its profit guidance by 3% from its original forecast.

Lowe’s needs a new, more dependable engine for growth amid slowing sales in its vast fleet of urban retail stores. It appears to have found it: Rural America.

“While in years past, our penetration of rural and remote stores was viewed as a competitive disadvantage, we now expect that these stores will be a key component of our operating profit growth over the next 3 to 5 years,” Lowe’s CEO Marvin Ellison, said Tuesday during the company’s earnings call with analysts.

The home improvement retailer also announced that it was scaling its rural store format to as many as 300 additional stores by year end, with the rural-focused stores offering “a wider offering of farm, ranch and outdoor products that positions Lowe’s as a one- stop shop to make it convenient for rural customers to get what they need in one shopping trip.”

Lowe’s said its rural store would cater to the specific indoor and outdoor needs of rural homeowners with product categories such as pets, livestock, trailers, fencing, utility vehicles, clothing and specialized hardware.

The company’s enthusiasm about pushing more aggressively into smaller rural communities comes as its sales in larger metropolitan markets have slowed post-pandemic.

Lowe’s says it has seen success with pilots set up a year ago to test stores tailored for rural shoppers.

“When we looked at the pilot stores where we’ve been very diligent on going after those specific categories of apparel, farm and ranch types of items as part of our expansion opportunity, we actually saw sales per square foot increase,” said Ellison.

“We see this as a unique opportunity with an expense base that is lower. If you can have a lower expense base, then you can increase sales per square footage,” he said.

Ellison said it might even make sense for Lowe’s to introduce specific products that excelled in sales with rural shoppers into its nonrural store locations.

“We’re seeing things like ATVs, having no idea if customers will respond, and it’s been an incredible growth category for us,” said Ellison. “We are finding categories in these rural stores that we think will be relevant in nonrural locations.”

Home Improvement home improvement showhome improvement streaming netflix

Post navigation

Previous post
Next post

Related Posts

NARI Milwaukee kicks off its Spring Home Improvement Show

05/09/2024

WEST ALLIS, Wis. — The National Association of the Remodeling Industry (NARI) Milwaukee is putting on its annual Spring Home Improvement Show at the State Fair Park this weekend. With the pandemic in the rearview mirror, NARI Milwaukee says there are signs that the construction and home improvement industries are…

Read More

2024 Remodeling Trends To Watch For – Forbes Home

29/06/2024

With the current housing economy, multi-generational homes will be a prominent feature for 2024, as people are moving back in with their parents or having their parents or other family members move in with them. “Adding separate entrances, upgrading the basement to have a second kitchen, and closing off the…

Read More

Decrease in home-improvement sales counters inflation costs | News

06/09/2024

The high volume of home renovations undertaken during the pandemic may finally have peaked, as Home Depot announced 2023 sales may decline as much as 7% to 13% – its first drop in sales in nearly 15 years. This dip, paired with the findings of a recent study on home…

Read More

Recent Posts

  • Understanding the Technologies Behind Self-Driving Cars
  • The Art of Engraving in Jewelry
  • A Guide to Understanding Different Metal Purities
  • Cooking with Seasonal Fish: Healthy and Delicious Recipes
  • Exploring the Role of Technology in Modern Legal Practices

Tags

Art assortment automotive beauty breaking business buying cheap bathroom decorating ideas pictures developments drive estate finest gadgets headlines health house improvement indonesian information jewellery latest major malang newest new house design online photography pictures property renovating renovation renovation house renovation ideas renovation loan renovation process renovation restoration renovation work reviews service style technology updates videos wedding within

About Us

  • Sitemap
  • Disclosure Policy
  • Contact Us
©2025 HD | WordPress Theme by SuperbThemes

WhatsApp us