(Reuters) -Lowe’s Cos Inc on Wednesday forecast full-year 2022 revenue and profit below analysts’ estimates, signaling that a pandemic-driven surge in demand for home improvement products would wane.
Lowe’s said it expects same-store sales to fall as much as 3% next year, as the easing of coronavirus restrictions encourages Americans to leave behind some pandemic shopping habits such as spending on paint, tools and gardening equipment for DIY projects.
“Looking ahead to 2022, the home improvement sector is likely to contract modestly given that the industry benefited from both higher inflation and government stimulus this year,” Lowe’s Chief Financial Officer David Denton said in a conference call.
Denton said he expects demand to decline in mid-single digits in 2022, adding that rising distribution costs due to global supply chain hurdles and higher wage expenses are also expected to hurt Lowe’s profit next year.
The company expects 2022 total sales to be between $94 billion and $97 billion, below analysts’ estimates of $97.6 billion, according to Refinitiv IBES data. It also forecast earnings per share of $12.25 to $13, largely below estimates of $12.93 per share.
The retailer’s shares fell about 2% in premarket trading. The company’s stock has benefited from the pandemic and has been trading at record levels since Lowe’s lifted its current-year outlook last month boosted by strong holiday season spending.
(Reporting by Uday Sampath in Bengaluru; Editing by Amy Caren Daniel)
