The Highs and Lowes

Image source: MidJourney and Jonathan Weiss - Shutterstock

What's going on?

Home improvement retailer Lowes gave a worrying results lowdown on Wednesday.

What does this mean?

Lowe’s was laughing all the way to the bank this time last year, as a red-hot housing market spurred folk to reach for their toolboxes and spruce up neglected pads. But today it’s a different story: cash-strapped shoppers are spending whatever money they can scrimp together on experiences like entertainment and travel not patio furniture and paint. That meant that Lowes same-store sales dropped 1.5% last quarter, despite a few bright spots like increased sales to tradespeople and strong orders online. In fact, the only thing that saved Lowe’s from a dip in overall revenue was the fact that the quarter was a week longer than the same one the year before.

Why should I care?

The bigger picture: Feeble retail.
Things only got worse from there for Lowe’s shareholders, with the full-year sales outlook coming in well below expectations mirroring forecasts by rival Home Depot. But hey, at least Lowes investors werent short of company, especially since Kohls and Dollar Tree shared some dismal outlooks and flailing quarterly results of their own on Wednesday. Put it together, though, and thats a worrying trend: if retails this weak when consumer spending is still holding up, then who knows what a recession might do to it.

Zooming out: Homesick.
It’s not just demand for home improvement that’s slipping: buying a home isnt appealing to folk right now either. Data out earlier this week showed that US house prices tumbled for the sixth straight month in December, and its not hard to see why: first-time buyers are daunted by rising borrowing costs, and current owners, whove already locked in low mortgage rates, are pretty happy to stay put.

Originally posted as part of the Finimize daily email.

The top 2 financial news stories in 3 minutes. Join over one million Finimizers

Read next

Indias Speed Wobble

Sign up to Finimize

Get the two most important global financial news stories each day. Sent at midnight UK time.

Get started with one email a day

The top financial news stories in 3 minutes.