FINANCE

Lowe’s 1Q Profit Falls Nearly 18%

BY CSA STAFF

Charlotte, N.C. Lowe’s Cos. reported a 17.9% drop in first-quarter earnings and lowered its guidance for the year on Monday as the slumping U.S. housing market and softer economy hurt sales.

Lowe’s said it earned $607 million in the three months ended May 2 down from $739 million in the first quarter of 2007. Revenue slipped to $12.0 billion from $12.2 billion a year ago.

Same-store sales declined 8.4%. The company predicted that number would drop at least 6% in the current quarter and the year.

“The challenging sales environment we have been experiencing for the past six quarters continued into the first quarter of 2008,” said chairman and CEO Robert A. Niblock in a statement. “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.”

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Earnings to face extra scrutiny

BY CSA STAFF

Look for first-quarter financial results due out tomorrow from Target to be scrutinized even more closely than normal, as undecided investors in the company’s proxy contest get a new set of numbers on which to base their vote.

Swing voters may be disappointed, however, as the company already revealed it would beat analysts’ estimates of earnings per share of 52 cents that were in place at the time the company reported a slight uptick in April same-store sales. Analysts’ now project the company will earn 59 cents a share. The company’s top line challenges are well documented, as such discretionary categories as home and apparel remain under pressure, and monthly results for the quarter have already been reported. Improvements in profitability therefore will come largely as a result of expense control. That’s not as good as driving profits through sales, but it could be enough to persuade swing voters to side with the company’s existing slate of directors.

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Court approves sale of Sharper Image

BY CSA STAFF

SAN FRANCISCO The United States Bankruptcy Court for the District of Delaware has approved the sale of Sharper Image. The court agreed to allow the company to sell all or part of its assets at an auction to be held on May 28.

In connection with those procedures, the court also authorized the companys entry into an asset purchase agreement and an agency agreement, each dated May 13, with a joint venture of Gordon Brothers Retail Partners, GB Brands, Hilco Merchant Resources, and Hilco Consumer Capital. Hilco/GB Joint Venture will serve as a stalking horse bidder for the purposes of the auction.

On April 24, Sharper Image reported that it has decided to pursue a sale of its business and assets pursuant to the provisions of the bankruptcy code and will solicit indications of interest from potential acquirers.

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