You can acknowledge that he was racist and still appreciate his work/reference him.

Separating the art from the artist doesn’t make you complicit in their shitty opinions; there’s still a lot to get out of Lovecraft’s stories, he’s one of the core pillars of modern horror after all, his influence is inescapable. You could argue it’s a different story when it comes to living artists/celebrities, since you are in some way contributing to their success, but Lovecraft is long dead, his work is literally so old it’s public domain lol, you’re good.

I’ve personally been reading many of his stories lately for inspiration, and it’s been very enriching. You have to keep an eye on the racist overtones of some of them, but as long as you do I don’t see the issue.