Lowe’s CEO raises red flag about shift in customer behavior

Lowe’s, one of the largest home improvement retailers in the U.S., continues to battle a concerning customer trend that is impacting sales growth.

In its third-quarter earnings report for 2025, Lowe’s revealed that its comparable sales only increased by 0.4% year-over-year during the quarter. Also, according to recent data from Placer.ai, foot traffic in its stores dipped by 0.1% during the quarter compared to the same time period last year. 

The weak consumer demand follows Lowe’s completion of two major acquisitions this year, which aimed to expand its offerings to Pro customers (professional contractors) in its stores. 

In June, the retailer completed its $1.3 billion acquisition of Artisan Design Group, which specializes in providing design, distribution and installation services for interior surface finishes, such as flooring and cabinets, to home builders and property managers. 

By October, Lowe’s finalized its $8.8 billion acquisition of Foundation Building Materials, a leading distributor of interior building products, including hardware, drywall, insulation and ceiling systems, serving residential and commercial professionals.  

Lowe’s CEO calls out what's causing slow sales growth

During an earnings call on Nov. 19, Lowe’s CEO Marvin Ellison said that sales during the third quarter this year appeared weaker compared to the same quarter in 2024, mainly because of hurricanes Helene and Milton, which devastated several southern states in September and October last year.

During that time period, Lowe’s faced elevated sales as consumers purchased goods to prepare for the storms. There was a lack of storms during the third quarter of this year, resulting in lower demand. 

Ellison also said that current economic uncertainty continues to deter customers from making larger discretionary purchases.

“Affordability and uncertainty in the broader economy continue to weigh on consumer confidence, particularly when it comes to larger discretionary purchases, as borrowing costs have been elevated for longer than originally anticipated,” said Ellison.

Related: Home Depot faces growing consumer boycott calls ahead of holidays

He emphasized that Lowe’s is hoping that lower interest rates in the housing market will eventually boost demand in its stores. 

“Looking ahead, lower interest rates, including for home equity loans, could begin to spur demand, even as many homeowners remain reluctant to move and give up their historically low mortgage rates,” he said. “This cycle is different from past housing slowdowns in a few important ways. First, homeowners today have record levels of equity, roughly $400,000 on average. At the same time, they are more likely to invest in the home they already own instead of giving up the low mortgage rate. This is referred to as the lock-in effect and could make home equity financing a more attractive solution.”

The average 30-year mortgage rate in the U.S. has hovered above 6% since 2022, prompting many consumers to avoid purchasing new homes as affordability continues to be a challenge. The U.S. housing market is slowly bouncing back as interest rates have declined in recent months.

How the U.S. housing market performed in October 2025:

• The average 30-year fixed-rate mortgage in October was 6.25%, down from 6.35% in September.
• Existing-home sales rose by 1.2% month-over-month.
• Specifically, month-over-month U.S. home sales increased in the Midwest and South, but remained stagnant in the Northeastand declined in the West.
  Sources: National Association of Realtors, Freddie Mac

"Home sales increased in October even with the government shutdown due to homebuyers taking advantage of lower mortgage rates," said NAR Chief Economist Lawrence Yun in a press release. "First-time homebuyers are facing headwinds in the Northeast due to a lack of supply and in the West because of high home prices. First-time buyers fared better in the Midwest because of the plentiful supply of affordable houses and in the South because there is sufficient inventory."

Shoppers are pulling back their spending

Amid economic challenges, Lowe’s saw its comparable average ticket (the amount of money customers spent per purchase) increase by 3.4% year-over-year. However, comparable transactions declined 3%. This comes after Lowe’s recently implemented price increases in its stores in response to President Doland Trump’s tariffs. 

“I will reference that in Q3 (the third quarter), we did have some modest price increases,” said Ellison. “When we look at like-for-like, inflation, again, modest, it’s very consistent with our expectations and also the year-to-date trends that we’ve seen as we continue to watch tariffs move through the system. The offset is transactions, and that has been pressured by the lower DIY demand.”

A recent survey by Wunderkind found that many consumers nationwide have become more cautious about their spending as they face higher prices for goods due to tariffs. 

How U.S. consumers are battling tariffs in 2025:

• Amid tariffs and inflation, 60% of consumers feel cautious, pessimistic, or panicked about the economy.
• Approximately 61% cited higher prices as their top issue, while 50% cited unpredictable price increases. 
• Also, 37% are buying fewer nonessential items, while 47% are seeking deals more often and 34% are shopping less overall.
  Source: Wunderkind

Lowe’s doubles down on plan to attract customers

As Lowe’s struggles to significantly boost sales in its stores amid recent economic challenges, it plans to double down on its “Total Home Strategy,” which includes expanding its offerings for pro customers through its Pro Extended Aisle, which is a digital catalog that offers products, inventory tracking and supplier services.

The strategy also involves enhancing the online experience for customers across Lowe’s website and mobile app to make it simpler and faster for shoppers to find products. 

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Lowe’s also plans to leverage its customer loyalty programs to launch more personalized and value-enhancing offers. It will also further build out its home services business and increase space productivity.

As the company plans to focus on these initiatives, it expects its comparable sales for the year to be roughly flat, which is at the lower end of its previous guidance.

“I think when I step back and look at the totality of the year, we’re now three quarters of the way through, obviously navigating a lot of factors, a very choppy macro,” said Ellison. “When I look at just the trends of the business, I think a lot for us to be cautiously optimistic about as we look ahead to 2026.”

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