Lowe’s Warns 25% Tariffs to Add $450 M Costs as Housing Starts Fall
Lowe’s shares dropped 4.3% after executives projected that upcoming 25% steel and aluminum tariffs will add roughly $450 million in costs this year and noted U.S. housing starts held at an annualized 1.1 million units, the lowest since 2020, restricting DIY demand. Management cut its comparable sales growth outlook to below 2% for Q1 as materials costs rise and builder confidence softens.
1. Stock Reaction
On February 25, Lowe’s shares fell approximately 4.3% as investors digested warnings of rising input costs and a sluggish housing market that could curb consumer spending on home improvement projects.
2. Tariff Impact
The company projected that new 25% tariffs on steel and aluminum imports will increase annual materials costs by about $450 million, pressuring gross margins in the second quarter and beyond.
3. Housing Market Conditions
U.S. housing starts remained at an annualized pace of 1.1 million units—near the lowest level since 2020—limiting foot traffic and discretionary spending on renovation supplies.
4. Updated Outlook
In response to these headwinds, Lowe’s trimmed its Q1 comparable sales growth target to below 2%, citing higher costs and soft builder confidence as key risks to revenue and profitability.