NY Times
The Lowe’s Companies, the second-largest home improvement chain, posted a 30 percent drop in quarterly profit on Monday as consumers put off big renovations.
Lowe’s, like its bigger rival, Home Depot, has suffered badly in the housing slump. It has also taken longer to put in place cost controls to weather the downturn.
Robert A. Niblock, Lowe’s chief executive, said he expected the housing market to start to recover by the middle of 2010, though the company has begun to see improvements in some of the hardest-hit regions, like California and Florida.
The company’s shares closed down 11 cents on Monday, while Home Depot’s rose 1.1 percent. Home Depot is expected to report earnings on Tuesday.
Sales in the quarter fell 3 percent, to $11.37 billion, slightly above expectations of $11.28 billion. Same-store sales, or sales at stores open for at least a year, fell 7.5 percent.
Lowe’s margins rose and the retailer forecast that its operating margin would increase 0.1 percent in the final quarter, mitigating the chain’s larger-than-expected quarterly losses.
Lowe’s also took an optimistic view of the fourth quarter and forecast that profits would range from 9 to 13 cents a share, which could beat analysts’ expectations of 10 cents a share.
Lowe’s said it expected total sales in the last quarter to be flat, while same-store sales would fall 2 to 6 percent.
It plans to open 13 new stores in the fourth quarter. Lowe’s opened 12 stores and closed one in the third quarter.
Lowe’s, like its bigger rival, Home Depot, has suffered badly in the housing slump. It has also taken longer to put in place cost controls to weather the downturn.
Robert A. Niblock, Lowe’s chief executive, said he expected the housing market to start to recover by the middle of 2010, though the company has begun to see improvements in some of the hardest-hit regions, like California and Florida.
The company’s shares closed down 11 cents on Monday, while Home Depot’s rose 1.1 percent. Home Depot is expected to report earnings on Tuesday.
Sales in the quarter fell 3 percent, to $11.37 billion, slightly above expectations of $11.28 billion. Same-store sales, or sales at stores open for at least a year, fell 7.5 percent.
Lowe’s margins rose and the retailer forecast that its operating margin would increase 0.1 percent in the final quarter, mitigating the chain’s larger-than-expected quarterly losses.
Lowe’s also took an optimistic view of the fourth quarter and forecast that profits would range from 9 to 13 cents a share, which could beat analysts’ expectations of 10 cents a share.
Lowe’s said it expected total sales in the last quarter to be flat, while same-store sales would fall 2 to 6 percent.
It plans to open 13 new stores in the fourth quarter. Lowe’s opened 12 stores and closed one in the third quarter.
