Lowe’s: Mortgage Woes Could Impact Business
Atlanta, The chairman of Lowe’s Cos. Inc. warned on Tuesday that continuing problems in the subprime mortgage sector may hurt its business in some areas.
“I don’t think it’s going to totally derail us in 2007, but I think it could have an impact in some markets on us,” chairman Robert Niblock said at a consumer conference.
Problems in the subprime mortgage sector, which involves loans to borrowers with poor credit histories, have weighed on U.S. financial markets in recent weeks. On Tuesday, the Mortgage Bankers Association said lenders began foreclosure against more than one of every 200 U.S. mortgage borrowers in the fourth quarter, a record level. Delinquencies rose in 49 states and among all loan types.
Niblock said although Lowe’s does not expect a rapid recovery in the housing market, “We’re seeing signs that the worst is behind us, which will mean easier comparisons.”
Niblock said Lowe’s was not seeing much change in competition as industry leader Home Depot looks to invest more in store improvements. He said data from a third-party firm showed Lowe’s gained unit market share in all the product categories it sold in 2006.
As Lowe’s adds stores in bigger U.S. cities, it was mulling different store formats, he said, such as locations with parking and garden centers on the roof, as well as two-level stores.
Niblock also said Lowe’s was not inclined to buy the professional supply business that Home Depot is considering selling. Instead, he said that Lowe’s was focusing on expanding business with commercial customers through its retail stores.
Kroger 4Q Profit Rises 36%
Cincinnati, Kroger Co. said Tuesday its fourth-quarter profit climbed 36% on strong sales growth. Quarterly earnings rose to $384.8 million from $282.1 million in the prior-year quarter. Revenue grew 15% to $16.86 billion from $14.72 billion a year ago. Comp-store sales grew 5.9% in the quarter, including fuel centers. Excluding the fuel centers, comp-store sales climbed 5.5%.
Dick’s Sporting Goods to Open 62 Stores
Pittsburgh, Dick’s Sporting Goods Inc. on Tuesday said it plans to open 45 nameplate locations and 17 Golf Galaxy stores in 2007. On Feb. 13, Dick’s completed its acquisition of Golf Galaxy.
The sporting goods retailer also said it expects earnings and same-store sales growth in the first quarter and full year.