Lowe's sales suffer as home improvement slowdown persists

Lowe's Cos. said its sales will fall further this year as consumers continue to hold off from sprucing up their homes amid higher mortgage rates and a drop in new construction projects.

Comparable sales for the current fiscal year will be down between 2% and 3%, a slightly larger dip than analysts were expecting, the retailer said Tuesday. Lowe's saw like-for-like sales fall 6.2% for the fourth quarter, though analysts were expecting an even worse performance.

"This quarter we delivered strong operating profit and improved customer satisfaction, despite the continued pullback in DIY spending," Chief Executive Officer Marvin Ellison said in a statement.

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The most recent U.S. housing data has shown some improvement in sales of new and existing homes, but still-high borrowing costs mean that residential real estate activity is muted compared with a year ago. 

While home sales aren't a direct indicator of Lowe's sales, new purchases often fuel demand for home construction projects. Home owners who take on improvement projects make up about 75% of Lowe's sales. 

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In November, Lowe's cut its full-year forecast, citing fewer purchases of big-ticket items and a slowdown in spending by DIY customers. 

Total sales for the fourth quarter fell to $18.6 billion, from $22.4 billion for the same period in the prior year. Earnings per share were $1.77, better than expected for the quarter.