Lowe's 3Q Profit Up 17% But Sales Miss View; Annual Target Cut
Monday 11/15/2010 7:41 AM ET - Dow Jones News
Lowe's Cos. (LOW) said its fiscal third-quarter earnings rose 17% as revenue and margins improved, though sales were lower than expected.
The home-improvement retailer also lowered its forecast for the year to earnings of $1.37 to $1.40 a share on revenue growth of 3% to 4% and same-store sales climbing 1% to 2%. The company had previously forecast earnings of $1.38 to $1.45, revenue rising 4% and same-store sales climbing about 2%.
Lowe's also forecast fourth-quarter results bracketing analysts' expectations, with same-store sales flat to up 2%.
"Ongoing uncertainty in employment and housing continues to pressure our industry, but we are prepared to operate effectively in a slow-growth environment," said Chairman and Chief Executive Robert Niblock.
Demand at home-improvement retailers has improved after years of declines, though concerns still remain as unemployment remains high and consumers still reluctant to spend. In August, Niblock said the company would need improvement in the labor and housing markets to support better demand for home-improvement products.
For the quarter ended Oct. 29, Lowe's posted a profit of $404 million, or 29 cents a share, up from $344 million, or 23 cents a share, a year earlier. The results included charges of 2 cents and 1 cent, respectively.
Revenue climbed 1.9% to $11.59 billion, and same-store sales increased 0.2%.
The company had forecast earnings of 28 cents to 32 cents and revenue up 3% to 5%, with same-store sales rising 1% to 3%. A year earlier, revenue had declined 3% and same-store sales dropped 7.5%.
Gross margin rose to 35% from 34.2%.
Shares closed at $21.69 Friday and were inactive premarket. The stock has fallen 7.3% this year.