Lowe's Profit Slumps 24% in Quarter

Mooresville, NC, Nov. 17, 2008--Lowe's Cos. reported a 24% drop in fiscal third-quarter profit, hurt by consumers paring back on discretionary and big-ticket spending in the face of an uncertain economic outlook.

The company said net income in the quarter ended Oct. 31 fell to $488 million, or $0.33 a share, from $643 million, or $0.43 a year earlier.

Sales rose 1.4% to $11.7 billion.
 
For the year, Lowe's pegged its profit estimate at $1.46 to $1.54 a share with comparable-store sales declining as much as 7%. That fell short of its previous projection of profit of as much as $1.56.

Sales got a pick-up in demand from home maintenance and outdoor projects as well as from hurricane-related boost in the Gulf Coast, but they weren't enough to offset the negative impact of consumers continuing to delay discretionary and bigger-ticket purchases that led to a drop in sales at stores open at least a year, Lowe's said.

"We expect continued, broad-based external pressures on our industry, as rising unemployment, falling home prices, tight credit and volatile equity markets continue to erode consumer confidence and impact sales," said Chief Executive Robert Niblock.
 
Lowe's is controlling expenses and has said it would pare back its store-opening plan.