(Bloomberg) -- Lowe’s Cos. extended its streak of declining sales during the third quarter as it continued to feel the ripple effects of a weak housing market.
Lowe’s said its comparable sales – a key metric for the retail industry – fell 1.1% for the period through Nov. 1. That compared with a 2.7% drop that Wall Street analysts were expecting.
High interest rates have weighed on home improvement spending as US consumers continue to postpone buying houses and put off expensive projects that may require financing. Sales at Lowe’s and Home Depot Inc. have suffered over the past two years as a result.
Lowe’s shares slipped 1.9% at 7:44 a.m. in premarket trading in New York. The stock rose about 22% this year through Monday’s close, while the S&P 500 index increased 24%.
Still, the company raised its sales forecast for the year, buoyed during the quarter by high-single-digit positive comps in the professional business — serving contractors and others working on larger projects — strong online sales and spending on smaller-ticket outdoor projects, Chief Executive Officer Marvin Ellison said in a statement.
Results were “modestly better than expected, even excluding storm-related activity,” Ellison said.
The company said it now expects comparable sales to drop as much as 3.5%, versus the previous guidance of a 3.5% to 4% decline. That’s slightly better than what Wall Street analysts were expecting.
Despite stubbornly high mortgage rates, and housing demand that has not shifted, people are buying smaller-ticket items. Home Depot said last week that hurricanes and warm weather helped drive up demand for products like generators and outdoor grills.
Lowe’s reported its quarterly results ahead of the holiday shopping season’s all-important Black Friday weekend. Operators are facing budget-conscious consumers as well as a shopping period that is shorter than usual because Thanksgiving falls late in November.
--With assistance from Julia Fanzeres.
(Updates share trading, recasts first paragraph.)
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