The trend: The US housing market is in a rut due to high interest rates, economic uncertainty, and limited inventory.
The slow housing market has hurt both home improvement retailers Lowe’s and Home Depot, as well furniture and home goods sellers as there are fewer people buying products such as house paint, appliances, and furniture to fix up their new homes.
A tough quarter: Lowe’s sales in its fiscal Q4 fell short of Wall Street’s expectations as its same-store sales fell 1.5%. While its revenues rose to $22.45 billion from $21.34 billion a year earlier, the company’s fiscal Q4 included an extra week. Without that additional period, sales would have declined slightly.
It isn’t just retailers that sell housing-related products that are adopting a cautious outlook. Retailers across a broad array of categories—including Target, Walmart, Dollar General, and Steve Madden— all recently offered cautious guidance, underscoring the uphill battle for Lowe’s.
The big takeaway: After many stuck-at-home consumers embarked on home improvement projects early in the pandemic, there are fewer prospective consumers in the market for items like appliances and paint—particularly given that fewer people are buying houses.
This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.