"Some Lowe's customers are spending on relatively affordable improvements to their homes, CEO Marvin Ellison said on the retailer's third-quarter earnings call on Wednesday. Such purchases include water heaters, kitchen sinks, and windows, executives said on the call. Sales in those areas have also benefited as Lowe's has digitized more of its sales process and added new product selections in some categories, executives said."
"While modest compared to a whole-home renovation or new construction, these projects represent "signs of life in areas that make us cautiously optimistic that maybe there are brighter days ahead," Ellison said. Ellison said that "affordability and uncertainty in the broader economy continue to weigh on consumer confidence, particularly when it comes to larger discretionary purchases.""
Homeowners are avoiding large, discretionary renovations because elevated interest and mortgage rates have increased borrowing costs and reduced consumer confidence. Some homeowners are pursuing smaller, lower-cost projects such as water heaters, kitchen sinks, and windows, driving sales growth in those categories. Digitization of the sales process and expanded product selections contributed to category gains. The retailer reported third-quarter results above expectations but issued lower profit guidance for 2025. Many homeowners are waiting for interest rates to fall before taking on bigger projects. Falling rates could unlock an estimated $11 billion to $13 billion in home equity and spur larger renovation demand into 2026.
Read at Business Insider
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