Lowe
Lowe’s Cos. reported a 17.9% drop in first-quarter earnings on Monday as the slumping U.S. housing market and softer economy hurt sales. Its shares fell almost 3% in premarket trading.
The nation’s second-biggest home improvement retailer said it earned $607 million, or 41 cents per share, in the three months ended May 2. That is down from $739 million, or 48 cents per share, in the first quarter of 2007.
Revenue slipped to $12.0 billion from $12.2 billion a year ago.
Analysts surveyed by Thomson Financial had been looking for net income of 40 cents a share on revenue of $12.4 billion. Estimates usually exclude one-time items.
Comparable-store sales — a closely watched gauge of retail health that measures sales at stores open at least a year — declined 8.4%. The company predicted that number would drop at least 6% in the current quarter and the year.
Lowe’s (LOW, Fortune 500) shares fell 73 cents, or 2.9%, to $24.16 in premarket trading.
"The challenging sales environment we have been experiencing for the past six quarters continued into the first quarter of 2008," said Chairman and Chief Executive Robert A $1500 payday loan. Niblock in a statement accompanying the report. "The generally poor economic outlook, including well-known housing pressures, rising food and fuel prices and a more negative employment picture eroded consumer confidence and impacted discretionary purchases for the home."
The company expects second-quarter total sales to rise about 1% on earnings of about 54 cents to 59 cents a share. Analysts have forecast earnings of 56 cents per share. For the year, total sales are expected to increase about 1%.
Lowe’s and bigger rival Home Depot Inc., which is expected to post first-quarter numbers Tuesday morning, have seen profits slide over the past year as a slump in the housing industry continues.
But the sentiment on Wall Street has been positive recently, and many expect home improvement retailers to benefit from an eventual recovery in the housing market. Shares of Lowe’s have risen 10% so far this year.