Lowe's (LOW) is likely to follow in Home Depot's (HD) footsteps as shoppers hold off on home renovations amid a difficult macroeconomic environment.

On Tuesday, Lowe's is expected to report its fiscal Q2 earnings report before market open. Based on Bloomberg consensus data, Wall Street expects revenue to decline roughly 4% year-over-year to $23.9 billion, adjusted earnings per share will drop 13% to $3.97.

Same-store sales are expected to fall 4.43%, driven by weaker foot traffic trends, down 0.74%, and smaller check size, down 3.6%. This would mark the seventh straight quarter of sales declines for the home improvement retailer.

It its Q1 earnings call, CEO Marvin Ellison said that "uncertainty around interest rate cuts, stubborn inflationary pressures and a consumer still showing a preference towards spending on discretionary services and experiences continue to weigh on the DIY home improvement demand."

He added, "Real wage growth and home price appreciation are solid, but the home improvement customer is still on the sideline, expressing concerns about higher cost of living and the state of the overall economy."

Last week, competitor Home Depot (HD) reported another quarter of muted earnings.

Home Depot reported revenue of $43.18 billion, compared to $43.79 billion expected, while adjusted earnings per share came in at $4.67, compared to estimates of $4.52.

Same-store sales declined by 3.3%, versus the 2.39% drop Wall Street expected. This also marked the seventh straight quarter of negative sales growth for Home Depot. US same-store sales were down 3.6%.

Both foot traffic and the average ticket dropped, down 1.8% and 1.3%, respectively.

The company updated its fiscal 2024 guidance. It now expects total sales, including the 53rd week, to increase in the range of 2.5% to 3.5% year over year, up from the 1% previously expected.

Comparable sales are set to decline between 3% and 4% for the 52-week period compared to fiscal 2023, worse than the 1% drop previously expected.

Home Depot said while comparable sales for the company aren't currently "on the trajectory" to decline 4%, that "implies incremental pressure on consumer demand."

Following Home Depot's results, Telsey Advisory Group, with research led by Joe Feldman, lowered its Q2 outlook and annual estimates for Lowe's. The firm expects same-store sales to fall 4.5%, and revenue to come in at $23.90 billion.

"Our anticipation of further weakness for Lowe's reflects a normalizing industry environment following the pandemic, a housing market that remains soft with higher mortgage rates, and the consumer facing general macroeconomic uncertainty regarding the election and decision-marking by the Federal Reserve for interest rates," Feldman wrote.

Feldman said Lowe's Total Home strategy — intended to provide a full range of products to DIYers and pros — should benefit the retailer long-term and gain market share.

Other home improvement retailers' soft Q2 results "solidify" concerns, per Feldman, including from Stanley Black & Decker (SWK), Floor & Decor (FND) and Tractor Supply (TSCO).

Here's what Wall Street expects from Lowe's this upcoming quarter, compared to what the company posted in Q2 of last year:

• Revenue: $23.9 billion, compared to $24.96 billion

• Adjusted earnings per share: $3.97, compared to $4.56

• Same-store sales growth: -4.43%, compared to -1.60%

  • Foot traffic: -3.60%, compared to -1.90%

  • Average ticket size: -0.74% compared to +0.30%

Following it's Q1 results, the company reaffirmed its 2024 outlook. It expected to end the year with total sales of $84 to $85 billion, with same-store sales down 2% to 3% year over year.

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Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at [email protected].

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