New York, NY, November 29, 2006--Lowe's continues to work on "retooling" its outlook for 2007 based on the recent sales environment, chief financial officer Robert Hull said Tuesday.
"We're still trying to complete our 2007 plan and we will update you on that further on our fourth-quarter call," Hull said during a presentation, which was Webcast, at a JPMorgan Chase & Co. conference for investors in New York.
Lowe's in September said it expected to increase sales by 10% to 13% and per-share earnings by 10% to 14% in 2007. It also outlined plans to boost sales by 11% to 13% and earnings by 12% to 16% in 2008 at the time.
"At our analyst conference, we provided you with a rough outline of what we expected to accomplish for 2007 and 2007," Hull told investors. "Some things changed for 2006 as it relates to the sales environment."
"When we first set our 2006 expectations, we included a 5% to 8% decline in housing," but housing starts were down about 14% through September and existing home sales in October were down 11.5% from a year earlier, he said.
"So certainly the downturn is much larger than we had expected," Hull said.
Hull's comments were similar to those by company Chairman Robert Niblock when the company reported third-quarter results Nov. 20. Niblock said then that it was too early to update forecasts for 2007 and beyond, but he noted 2006 had obviously come in below the earlier expectations.
Hull also on Monday reiterated Lowe's plans to open 155 stores this year, 155 in 2007 and 150 or so in 2008. "We're on track to open 155 this year and believe we have many years of growth ahead of us," he said.
New stores, he said, aren't having "a disproportionate impact on our existing stores." New stores on average perform at about 80% of the rate of existing stores, he said.
Hull provided little color on sales in recent weeks but reiterated the company's expectation that the fourth quarter's promotional environment should be consistent with that seen in the third quarter. 'We didn't see anything out of the ordinary in the third quarter," he said.
