Lowe’s (LOW) earnings Q1 2022

Lowe’s on Wednesday missed Wall Street’s sales expectations for its fiscal first quarter, as cooler spring weather hurt demand for supplies for outdoor do-it-yourself projects.

Shares were down more than 5% in early trading.

Here’s what the home improvement retailer reported for the quarter ended April 29 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

• Earnings per share: $3.51 vs. $3.22 expected
• Revenue: $23.66 billion vs. $23.76 billion expected

Lowe’s reiterated its full-year outlook, saying it expects total sales to range between $97 billion and $99 billion and same-store sales to range from a decline of 1% to an increase of 1%.

In an interview with CNBC, CEO Marvin Ellison said the underlying factors driving the home improvement industry have not changed: an aging housing stock, a shortage of available homes and appreciating real estate values. That’s giving consumers confidence to spring for a kitchen appliance or to redo a bathroom, despite inflation, he said.

“Home price appreciation simply gives the homeowner confidence that they can invest in their home and can get a return on their investment,” Ellison said.

Yet the chilly and cold April weather in parts of the country inspired Americans to put off purchases of grills, patio furniture and gardening supplies. He said Lowe’s is already seeing sales pick up in May and expects to make up for that weaker early spring in the second quarter as warmer and dryer weather arrives.

Ellison said the company has not seen signs of a more skittish consumers. Instead of trading down to cheaper products, he said Lowe’s shoppers are actually trading up to a new refrigerator or getting pricier lawn equipment.

“I’m not saying the macro environment does not matter. I’m saying that for home improvement we are not seeing any material impact,” the CEO said.

Lowe’s results diverged from those of its competitor, Home Depot. On Tuesday, Home Depot surged beyond Wall Street’s expectations for quarterly earnings and revenue, chalking up its growth to home appreciation and a boom in projects for housing professionals.

Lowe’s cited similar sales drivers, but has a different mix to its business. About 75% of its total sales come from DIY customers compared with Home Depot, which gets about half of its sales from them and half of its sales from home professionals like contractors, plumbers and electricians. That makes Lowe’s more vulnerable to shifts in demand, if homeowners decide to skip a painting or landscaping project.

Lowe’s net income for the quarter increased slightly to $2.33 billion, or $3.51 per share, from $2.32 billion or $3.21 per share, a year earlier. The results were above the $3.22 expected by analysts surveyed by Refinitiv.

Net sales fell to $23.66 billion from $24.42 billion last year and missed analysts’ expectations of $23.76 billion.

Same-store sales declined 4% year over year, a larger decrease than the 2.5% drop that analysts expected, according to StreetAccount.

As of Tuesday’s close, shares of Lowe’s are down about 25% so far this year. The stock closed Tuesday at $194.03, bringing the company’s market value to $128.27 billion.

Read the company’s earnings release here.

Correction: Lowe’s net sales missed analysts’ expectations. An earlier version misstated that fact.