On May 23, home improvement retailer Lowe’s Companies, Inc. reported 2023 first-quarter sales of $22.3 billion, down 4.3% compared to 1Q 2022. Lowe’s 1Q 2023 sales were also down slightly from $22.4 billion in 4Q 2022.

The year-over-year sales decline was driven by lumber deflation, unfavorable weather and lower DIY discretionary sales, the company said.

Despite a decrease in sales, Lowe’s posted 1Q net earnings of $2.3 billion and diluted earnings per share (EPS) of $3.77, up 7.4% from $3.51 per share in 1Q 2022. The earnings boost can be attributed to Lowe’s sale of its Canadian retail business in February, the company said. Excluding the positive impact of the sale, Lowe’s delivered adjusted diluted EPS of $3.67, up 5% year-over-year.

“We are pleased with the performance of our business despite record lumber deflation and unfavorable spring weather,” Lowe’s Chairman, President and CEO Marvin Ellison said in the report. “Although we delivered positive comparable sales in Pro and online for the first quarter, we are updating our full-year outlook to reflect softer-than-expected consumer demand for discretionary purchases. We remain optimistic about the medium-to-long term outlook for home improvement and our ability to continue to grow market share through our Total Home strategy.”

Due to higher-than-expected lumber inflation and lower discretionary sales, Lowe’s has made the following updates to its 2023 full-year outlook:

• Total sales of approximately $87 – $89 billion (previously $88 – 90 billion).
• Comparable sales expected to be down -2% to -4% as compared to prior year (previously flat to down -2%).
• Adjusted operating income as a percentage of sales (adjusted operating margin) of 13.4% to 13.6% (previously 13.6% to 13.8%).