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Lowe's reported quarterly results Wednesday.Steven Senne/The Associated Press

Lowe’s Cos Inc. warned on Wednesday that high spending on do-it-yourself projects by people hunkered down at home due to coronavirus lockdowns would taper off in the coming months, as a deep economic recession looms on the horizon.

The home improvement chain’s shares rose as much as 8 per cent in premarket trading after it reported its biggest rise in quarterly same-store sales in at least 15 years, but comments on the retailer’s outlook from chief executive officer Marvin Ellison quickly chilled investor optimism.

“This is, without question, the most challenging environment that any of us have ever worked in. And when we look at what the customers are buying and we look at the sustainability of it, we don’t see what occurred in Q1 (to continue),” Ellison said in a call with analysts.

Sales at Lowe’s and rival Home Depot both surged in April as shelter-in-place orders gave people more time to spend on minor remodeling and repair work around their houses.

Ellison said it was difficult to predict what would happen in the coming months, but anticipates those sales to start moderating at some point later this quarter and through the second half of the year.

His comments come a day after data showed U.S. homebuilding dropped by the most on record in April, feeding fears that the crisis would lead to the deepest economic contraction since the Great Depression.

Lowe’s net earnings rose 27.8 per cent to $1.34 billion in the quarter ended May 1, mainly driven by sales in rural area stores and online.

Excluding items, it earned $1.77 per share, beating estimates of $1.32 per share, according to IBES data from Refinitiv.

Same-store sales jumped 11.2 per cent, while analysts were expecting only a 3.4 per cent increase. The surge was the highest since at least April 2005.

The company shares were last up about 2 per cent.

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