Just one day after Atlanta-based rival Home Depot informed Wall Street analysts that it is still seeing an increase in customer visits amid trade concerns and declining consumer confidence, Lowe’s CEO Marvin Ellison acknowledged that the company’s first-quarter results represented a “mixed financial picture” as the retailer faces near-term economic uncertainty due to tariffs and challenges in the housing market.
“While the company managed to surpass earnings expectations, it struggled to meet revenue forecasts, indicating challenges in sales growth,” he said.
“The decline in comparable sales by 1.7 percent highlights ongoing difficulties in the retail environment, compounded by housing market challenges and elevated mortgage rates affecting consumer spending on big-ticket items.”
In response to questions about the impact of tariffs and the Trump administration’s trade war with China, Ellison said the company is working diligently to reduce its dependence on foreign-sourced products.
“Over the past several years, we’ve been partnering with our private and national brand suppliers to diversify our global sourcing efforts. As a result, approximately 20 percent of our purchase volume is currently concentrated in China,” Ellison said during the company’s conference call, adding that about 60 percent of the company’s purchases now originate in the United States.
“Although we are pleased with this reduced dependency, we’re not satisfied, and we’re working to accelerate our diversification efforts. Our global sourcing team has identified exciting diversification opportunities in the U.S. and around the globe that we’re actively pursuing.”
When asked about their price management amid the tariff environment, Ellison said the company takes “a portfolio approach to pricing,” meaning they use different strategies for different products and try to keep their prices “competitive.”
“I think the key point for us is that we’re going to be really price competitive in the home improvement channel, like we always are,” he said.
“We’re not in the habit of donating market share to the competition. And so in this environment, we’re going to be as keenly focused on competing on price as we are every single day, and we think we can do that and still deliver on the financial commitments. ”
The Mooresville, North Carolina-based home improvement giant was expected to report first-quarter earnings per share of $2.88 on revenue of $21.09 billion, according to FactSet’s consensus estimates. As noted, Lowe’s reported a 1.7 percent decline in same-store sales, which was better than the 2 percent decline analysts had expected for the quarter.
Privately held ADG has established a robust national following among commercial homebuilders for its design, distribution, and installation services, including flooring, cabinets, countertops, and other customized interior features. Owned by the Texas private equity firm The Sterling Group, ADG has completed more than 15 acquisitions since its founding in 2016 and now operates 132 distribution, design, and service centers across 18 states.
The Texas-based home supply distributor has built a national network of more than 3,200 specialized installers and long-standing relationships with single-family and multifamily homebuilders as well as property managers, achieving sales of $1.8 billion by the end of fiscal 2024.
“We expect this acquisition to increase our penetration of professional plan spend and will position us to gain market share in a highly fragmented $50 billion market,” said Ellison, noting that the deal is expected to close in the second quarter.
“We’ve been impressed with ADG’s strong leadership team and its customer-centric operating model, reflected in the best-in-class customer satisfaction scores it has earned from top builders in the U.S.”
Headquartered at the epicenter of flooding and devastation from Hurricane Helene in 2024, Ellison also noted that Lowe’s continues to be involved in the massive relief and cleanup efforts that are ongoing across North Carolina and other Southeastern states. To date, the North Carolina home improvement giant has pledged $2 billion to help affected communities where more than 350 Lowe’s stores are located across six states.
In other first-quarter highlights, Lowe’s reported a 6 percent increase in e-commerce sales, primarily driven by higher web traffic and improved conversion rates. The company reaffirmed its previous guidance for 2025, which includes $83.5–84.5 billion in sales and a flat to 1 percent increase in comparable sales. In addition, the home-improvement chain expects to achieve yearly earnings of $12.15–12.40 and capital expenditures of $2.5 billion.
Lowe’s shares fell 1.78 percent to close at $227.13 on the New York Stock Exchange on May 21. Over the past 12 months, the stock has risen 1.01 percent.
