I remember the time my wife asked me to install a new bathroom vanity (Thanks Chip and Joanna Gaines) and before I knew it that “quick weekend project” turned into a full-blown renovation disaster. That’s pretty much how Lowe’s latest sales report is shaping up.

(Source: Investopedia)

In fact, sales dropped by 5.6% compared to last year, falling to $23.59 billion— that may seem like a lot, but it’s well below what Wall Street was banking on. The culprit? The same deadly trio that’s been hammering Home Depot: A brutal mix of high interest rates, a shaky economy, and customers who’d rather dream about home makeovers than actually tackle them.

So, what’s going on? Why are people suddenly treating home improvement projects like that gym membership from Planet Fitness I’m going to use... next month? According to Lowe’s CEO Marvin Ellison, it’s all about financial uncertainty. “We’re all aware that we have an environment of elevated interest rates and inflation”. Basically, people are holding off on big projects until they can afford to take out a big fat loan.

(Source: Morning Brew)

Lowe’s same-store sales—a key retail performance indicator—tanked by 5.1%, even worse than the 4.43% drop analysts were bracing for. Meanwhile, Home Depot only saw a 3.3% dip last week, making Lowe’s look like the kid who flunked gym class. The hardest hit? Those big-ticket DIY projects, like full kitchen remodels and new flooring, are falling off faster than my Cardinals in the MLB playoff race.  

And then there’s the weather—because someone’s got to be the scapegoat, right? Apparently, all that rain sent seasonal and outdoor sales spiraling, leaving patio sets and gardening supplies sitting around for months. Sure, Lowe’s saw some growth in their Pro and Online businesses, but it wasn’t nearly enough to save the day. Their adjusted earnings per share hit $4.10, beating the $3.97 estimate, but let’s be real—that’s like finding 20 bucks in your pocket after getting a speeding ticket. It’s a nice little win, but it doesn’t even begin to fix the bigger mess.

Looking ahead, Lowe’s isn’t exactly jumping up and down with excitement. They’ve already cut their full-year outlook, expecting the DIY slump to drag on like the America’s Got Talent auditions my wife makes me watch every night. Ellison didn’t sugarcoat it. When asked about an economic rebound, he basically said, “Your guess is as good as mine.” Translation? Lowe’s is buckling up for a rough second half of the year, with comparable sales likely to dip another 3.5% to 4%.

So, what’s really driving this DIY downturn? High mortgage rates, plain and simple. They’ve made buying a new home crazy expensive, forcing people to stay put rather than splurge on upgrades. With median home prices hitting a record $419K in May, the idea of a new home—or even a new kitchen—is slipping out of reach for a lot of folks. And when they do have cash to spend, people are choosing a Sandals vacation over more paint or power tools.

(Source: Fox Business)

But here’s something to pay attention to: Despite consumers tightening their wallets due to the highest interest rates in over 20 years, Lowe’s stock is still up 10% this year, so things could be worse.

Stocks.News has positions in Lowe’s and Planet Fitness.