Lowe's forecasts annual earnings largely below estimates on cautious spending

(Reuters) -Lowe's Cos joined rival Home Depot in forecasting lackluster annual sales and profit on Wednesday, signaling that a downturn in the home improvement sector will linger amid higher interest rates.

Shares of the Mooresville, North Carolina-based retailer were up 3% in premarket trading as it reported a surprise rise in fourth-quarter same-store sales, helped by demand for water cans, generators and cleaning supplies after Hurricanes Helene and Milton last year.

The home improvement sector has witnessed a sharp slowdown over the last two years as high mortgage rates, rising home prices as well as refinancing costs stifled demand.

U.S. consumer confidence deteriorated at its sharpest pace in three-and-a-half years in February, data on Tuesday showed, in a sign that Americans were becoming more worried about the potential economic impact of President Donald Trump's policies.

The retailer cited near-term pressure in do-it-yourself projects such as flooring as well as kitchen and bath remodeling, which make up about 70% of its annual revenue.

Lowe's expects full-year 2025 comparable sales to be flat to up 1% compared to analysts' estimate of a 1.13% rise, according to data compiled by LSEG.

It forecast earnings per share in the range of $12.15 to $12.40, compared to analysts' estimate of $12.49 per share.

The company reported a 0.2% rise in same-store sales for the quarter ended January 31, compared to analysts' average estimate of a 1.9% decline.

(Reporting by Savyata Mishra in Bengaluru; Editing by Pooja Desai)