Lowe's on Wednesday reported mixed quarterly results as the home improvement retailer said it saw "pressure" in spending on projects.
Though the company did not cut its full-year guidance, it updated its outlook to the bottom end of its prior guidance. It now expects total sales of $92 billion, compared with $92 billion to $94 billion previously, and comparable sales to be flat, versus flat to up 2%. It expects adjusted earnings per share for the year of $12.25, versus $12.25 to $12.75 previously.
CEO Marvin Ellison told CNBC that he expects to see homeowners watch their wallets for the rest of the year.
"The good news is that we're not seeing these customers trade down," Ellison said. "They're just kind of on the sidelines, and so we're just anticipating this customer is going to remain cautious in the second half of the year."
He added that Lowe's expects the housing market "is going to gradually recover."
Shares of Lowe's rose roughly 4% in morning trading despite the cautious outlook.
Here's how the company performed in its fiscal second quarter compared with what Wall Street was expecting, according to a survey of analysts by LSEG:
For the quarter ended July 31, Lowe's reported net income of $2.4 billion, or $4.27 per share, roughly the same as the year-ago period. Excluding one-time factors and including tariff refund benefits, the company reported adjusted earnings of $4.40 per share.
Lowe's also said tariff refunds provided an 11-cent boost to its earnings per share this quarter. Ellison told CNBC the company received roughly $80 million in tariff refunds for the quarter.
The company reported total sales of $25.96 billion for the quarter, up from $23.96 billion the year prior. Comparable sales rose 0.2%, due in part to strong performance in its pro and home services sales, according to Lowe's.
Lowe's also saw a 15.7% increase in online sales, though it added that performance was partially offset by macroeconomic pressures for the do-it-yourself customers.
"We're really pleased to deliver our fifth consecutive quarter of positive sales comps with strong performance in pro online home services, which is our home installation businesses, and just the continued momentum in our total home strategy," Ellison told CNBC.
Ellison said on a call with analysts that the company saw "heightened competitive pressures" in July, but added that Lowe's is committed to providing value, innovation and differentiation to beat its competitors.
He emphasized that Lowe's does not believe the July impact is "the new normal" and is instead "transitory."
"We think it's the result of competitors having tariff refund dollars and looking for different ways to use those dollars to drive the top line, and so we don't see this as something that's going to shift historically," Ellison said on the call.