A pandemic-fueled boom in demand for products such as kitchen equipment and gardening tools is now fading as household budgets shrink, while Americans redirect their attention back to activities such as traveling.

A report from location analytics firm Placer.ai said visits to Lowe's stores dropped in the fourth quarter, also because spending on services exceed goods following the easing of pandemic-led curbs.

Larger rival Home Depot Inc. had also last week warned of a moderation in demand this year, while struggling with elevated costs and wage raises amid a tight U.S. labor market.

Lowe's said Wednesday it has awarded $220 million in bonuses to its employees, including supply-chain supervisors and hourly workers, in the fourth quarter.

Still, easing shipping and commodity costs helped the company's adjusted per-share profit of $2.28 top expectations of $2.21.

"With Home Depot helping lay the groundwork a week ago, really nothing too surprising here," Telsey Advisory Group analyst Joe Feldman said, adding the results were in line with expectations.

Lowe's, which has been trying to catch up with Home Depot, has more room to improve its margins this year, Feldman said. The company is expecting operating margin of 13.6% to 13.8% in 2023.

The company projected full-year total sales of $88 billion to $90 billion, while analysts estimated annual revenue of $90.48 billion, according to Refinitiv data.

Lowe's also forecast 2023 earnings in the range of $13.60 to $14.00 per share, the midpoint of which was slightly ahead of an estimate of $13.79.

Lowe's reported a 1.5% decline in comparable sales for the three months ended Feb. 3, worse than expectations of a 0.01% drop.