A challenging macroeconomic environment along with sluggish home sales and construction acted as a drag on Lowe’s Cos. Inc.’s Q2 overall earnings, but online sales grew year over year.

Total sales for the quarter, which ended Aug. 2, were $23.6 billion. That compares to $25.0 billion in the prior-year quarter. Comparable sales decreased 5.1%, which the retailer attributed to “continued pressure” on discretionary spending. Despite the drop, though, the tally still managed to beat industry analysts’ expectations.

Bill Boltz, vice president of marketing, told investors on the earnings call that Lowe’s marketing team is “rebranding” its retail media network.

It’s moving “to a simpler platform where we help our brand partners meet a wide range of marketing objectives from performance on shelf and new product launches to seasonal promotions and multiproduct sales,” Boltz said.

Lowe’s is No. 11 in the Top 1000, Digital Commerce 360’s database ranking North America’s biggest online retailers. The retailer is in the Hardware & Home Improvement category.

Lowe’s online sales in Q2

Lowe’s net income for Q2 totaled $2.38 billion. That’s down from $2.7 billion during the same period last year.

Still, there were some bright spots: the retailer’s Pro business grew, and so did Lowe’s online sales in Q2 — which grew 2.9%. The retailer said those two sales categories offset the pressure from big-ticket discretionary spending and unfavorable weather.

“When it comes to online sales, we delivered growth across all three business areas, driven by continued improvement in conversion rates as customers responded to our compelling offers and to our new expanded same-day delivery options that are now available on multiple platforms,” Marvin Ellison, Lowe’s CEO, told investors on the retailer’s Q2 earnings call.

And while Uber Eats typically delivers burgers and fries, they are now working — along with other last-mile courier companies — with Lowe’s to deliver drywall and lightbulbs.

“ As we continue to involve our omnichannel strategy, we’ve learned that having multiple delivery platforms extend our reach into both urban and suburban areas and helps us drive incremental sales with different types of customers, especially younger generations who are more digitally savvy,” Ellison said.

Lowe’s paints the way to profit in Q2

Lowe’s also is developing product-specific niche delivery mechanisms. Paint is a particular important segment.

“We are now partnering with Sherwin-Williams to offer customers free same-day delivery nationwide,” Boltz said. “Since painting is the No. 1 home improvement project, we’re making it easy and convenient for customers to order paint and paint supplies online and get it all delivered quickly right to their door.”

Ellison lauded the company’s initiatives to bring products directly to the customer’s door through various channels.

“The great thing about our gig network and the work that we’ve done online is that we’re serving all customers and giving them ability to get same-day, next-day fulfillment across all of our partners,” Ellison said

Lowe’s revises expected earnings downward

“The home improvement backdrop remains challenging, and consumer sentiment remains weak,” chief financial officer Brandon Sink said on the earnings call.

Based on sluggish consumer sentiment, Sink said Lowe’s is revising its expected earnings downward for the rest of 2024.

Lowe’s revised its 2024 sales outlook to be between $82.7 billion and $83.2 billion. That’s down from its previously projected $84 billion to $85 billion. Lowe’s also revised its comparable sales to be lower than it previously expected: down 3.5% to 4%. It previously projected a 2% to 3% comparable sales decrease.

An industry observer told Digital Commerce 360 that this is a tough time for the home improvement category.

“The cost of home improvement supplies has grown due to rising inflation,” says Destiny Chatman, CEO of Topcashback.com, which works with stores and consumers on rebate programs. “Inflation has discouraged consumers from taking on new projects, DIY projects, or professional, which is in contrast to the pandemic, when consumers embraced home improvement.”

Chatman notes that Lowes and Home Depot’s quarterly earnings have both been hurt by inflation and sour consumer sentiment. And while Lowe’s ecommerce numbers are improving, Chatman says there is still room for improvement.

“Today, consumers expect speedy, accurate delivery,” Chatman says. “Lowe’s has been missing the mark with its online delivery. Though Lowe’s has made progress in its ecommerce sales, it needs to be innovative if it wants to get online support from consumers.”

Check back for more earnings reports. Click here to read last quarter‘s Lowe’s earnings article.

Do you rank in our databases? 

Submit your data and we’ll see where you fit in our next ranking update.

Sign up

Stay on top of the latest developments in the online retail industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News. Follow us on LinkedIn, Twitter, Facebook and YouTube. Be the first to know when Digital Commerce 360 publishes news content.