09:04 AM EDT, 08/20/2024 (MT Newswires) -- Lowe's (LOW) cut its full-year outlook on Tuesday due to lower-than-expected do-it-yourself business sales and a challenging macroeconomic environment, while the company's fiscal second-quarter results fell year over year.

The home improvement retailer now anticipates adjusted earnings to come in between roughly $11.70 and $11.90 per share for fiscal 2024, down from its previous guidance of $12 to $12.30. Sales are expected between $82.7 billion to $83.2 billion versus prior projections of $84 billion to $85 billion. The consensus on Capital IQ is for normalized EPS of $12.04 and revenue of $83.88 billion.

The retailer also expects comparable sales to be down 3.5% to 4% for the ongoing fiscal year, compared with the previous outlook for a 2% to 3% decline. The Street currently estimates same-store sales of the company to decrease by 2.6% during the year.

"While we never love negative revisions, we think investors already anticipated a similar change," Truist Securities said in an emailed client note. "We think the near-term set up remains tricky, as the negatives (softening fundamentals) will likely be offset by positives (probable rate cuts), but we remain aggressive buyers for medium/longer-term investors," according to the brokerage.

For the three-month period ended Aug. 2, the company's net earnings fell to $4.17 a share from $4.56 the year before, but topped analysts' forecast for $4. The result included a $0.07 per share gain due to the 2022 sale of the group's Canadian retail business. Excluding this gain, earnings came in at $4.10 a share.

Last year, Lowe's completed the sale of its Canadian retail business to Sycamore Partners.

Sales dropped to $23.59 billion from $24.96 billion in the prior-year quarter, just shy of the Street's view for $23.96 billion. Comparable sales slipped 5.1%, worse than the 4.2% decline modeled by the market, due to persistent pressure in do-it-yourself big-ticket discretionary spending and unfavorable weather impacting sales in the seasonal and other outdoor categories.

"The company delivered strong operating performance and improved customer service despite a challenging macroeconomic backdrop, especially for the homeowner," Chief Executive Marvin Ellison said in a statement. "As we look ahead, we are confident that we are making the right long-term investments to take share when the market recovers."

Gross margin as a percentage of sales came in at 33.5%, compared with 33.7% in the prior-year quarter. Selling, general and administrative expenses decreased to $4.03 billion from $4.09 billion last year.

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