Mooresville, N.C. Lowe's Cos. said Monday poor weather and cautious consumer spending caused sales to fall below expectations and earnings to fall 19% in the second quarter. The company also plans to scale back new store openings in its next fiscal year in response to the poor ec
Lowe’s said profit fell to $759 million from $938 million last year. Revenue fell 5% to $13.84 billion, from $14.51 billion last year. Same-store sales fell 9.5% during the quarter.
“Wavering consumer confidence, unseasonable weather in core markets, and restrained customer spending compared to last year's fiscal stimulus-aided results led to lower than expected sales in the second quarter," Robert A. Niblock, Lowe's chairman and CEO, said in a statement.
Niblock said despite near-term pressure there are signs of a "bottoming process" in housing and the broader economy.
"We have seen customer traffic levels stabilize as we benefit from the resurgence of a do-it-yourself home-improvement mindset," he added.
The company said it is scaling back on expansion plans in 2010, and now expects to open 35 to 45 stores during the year. It said it is also taking a $48 million charge for canceling plans for several new stores.
Janney Montgomery Scott analyst David Strasser, who rates the company "buy" said the scaleback was positive, in an Associated Press report.
"We had modeled 60 to 65 stores versus Lowe's new guidance of 35 to 45 stores," he wrote. "This is good for the overall industry."