Home improvement retailer Lowe's Companies Inc. (LOW) on Monday posted lower profit for the third quarter, as consumer spending remained weak amid the broad-based pressures of the macro environment. Per share earnings fell 30.3% and missed the Street view. Further, the company issued financial forecast for the fourth quarter, and revised its full year outlook.
The Mooresville, North Carolina-based company's third-quarter net income was $344 million, down 29.5% from $488 million in the year-ago quarter. On a per share basis, earnings dropped 30.3% to $0.23 from $0.33 earned in the same quarter of last year.
On average, 27 analysts polled by Thomson Reuters expected the company to post earnings of $0.24 per share. Analysts' estimates typically exclude special items.
Following an evaluation of the expected performance of certain locations, the company decided to reduce the carrying value of assets for three operating stores and to recognize a charge related to the pipeline of potential future store sites it no longer intends to pursue. Further, Lowe's closed its central Milwaukee location on September 20. Hence, the company recognized a pre-tax charge of $57 million or about $0.02 per share, in the quarter. Also, the effective tax rate was favorably impacted during the quarter by the settlement of certain state tax issues, which positively impacted earnings per share by about $0.01.
Quarterly net sales totaled $11.4 billion, 3.0% lower than the previous year's net sales of $11.7 billion, with comparable store sales decline of 7.5%. Twenty two Wall Street analysts had a consensus revenue estimate of $11.28 billion for the quarter.
Robert Niblock, chairman and CEO of Lowe's, said, "The broad-based pressures of the macro environment are clearly evident in our sales as consumers continue to delay large purchases until they feel better about the economic outlook."
Niblock added, "As the economy and the housing market continue through the bottoming and recovery process, we know there will be ongoing macroeconomic challenges, including declining home values and rising unemployment. However, we are encouraged by the signs of stabilization in our business and remain confident we are well positioned to capture additional market share."
Lowe's also noted that it begins to see a glimmer of hope in some of the hardest-hit housing markets including California, Florida and areas of the desert Southwest.
Total expenses during the latest quarter increased to $3.36 billion from $3.21 billion incurred in the corresponding period of the previous year.
For the nine-month period, the company reported net income of $1.58 billion or $1.07 per share, compared to $2.03 billion or $1.38 per share in the prior-year period.
Net sales for the nine months ended October 30, 2009 were $37.1 billion, a decline of 3.1% from $38.2 billion reported in the comparable period of the previous year.
Looking forward to the fourth quarter, the company projects earnings to range between $0.09 and $0.13 per share, with total sales expected to be essentially flat to last year. Comparable store sales for the quarter is anticipated to drop 2% - 6%. The company expects to open about 13 new stores reflecting square footage growth of about 4%. Store opening costs are estimated to be about $10 million. Analysts are projecting earnings of $0.10 per share on revenue of $9.91 billion for the fourth quarter.
For fiscal year ending January, 2010, Lowe's currently forecasts earnings in a range of $1.16 - $1.20 per share, with total sales decline of 2% - 3%, and comparable store sales decrease of 7% - 8%. The company expects to open about 64 stores in 2009, reflecting total square footage growth of about 4%, and store opening costs are expected to be about $48 million. Analysts expect the company post earnings of $1.20 per share on revenue of $46.84 billion for the full year.
Earlier, the company had expected fiscal 2009 earnings in the range of $1.13 - $1.21 per share. Total sales were expected to decline about 3% from the previous year, while comparable store sales were estimated to decrease 7% - 9%.
Among Lowe's' rivals, Home Depot Inc. (HD) is scheduled to release its third-quarter results before the market opens Tuesday, with analysts expecting earnings of $0.36 per share on revenues of $16.28 billion. In the prior-year quarter, the company earned $0.45 per share and sales of $17.8 billion.
While reporting second-quarter numbers, Home Depot boosted its fiscal 2009 earnings per share forecast, currently expecting per share earnings from continuing operations to be flat to up 7% from last year, versus its earlier guidance of flat to down 7% from last year. Adjusted earnings per share from continuing operations for 2009 are now projected to decline by 15% - 20%, versus prior forecast of 20% - 26% decline. Home Depot also confirmed that it believes that fiscal 2009 sales will be down about 9% from the prior year.
Smaller peer, Lumber Liquidators Inc. (LL) posted third-quarter net income of $7.76 million or $0.28 per share, an increase from $5.46 million or $0.20 per share reported a year ago, reflecting improved gross margins and a 14.2% rise in sales. Quarterly sales increased to $140.52 million from $123.06 million in the previous year.
Lowe's shares, which have been trading between $13.00 and $24.09 in the past 52 weeks, closed Friday's trading session at $21.85, up 38 cents or 1.77%, on a volume of 17.5 million shares.
For comments and feedback contact: editorial@rttnews.com
June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.