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Lowe’s: Profits Up, Comps Down In Q3

11/20/2006 01:40:00 PM Eastern

Mooresville, N.C. – Lowe’s, the No. 2 home improvement chain, reported a 10.8 percent increase in net earnings to $716 million for its fiscal third quarter ended Nov. 3.

Sales for the three months increased 5.8 percent to $11.2 billion, although comparable store sales declined 4 percent, attributed to “the combined effects of a slowing housing market in parts of the United States, significant deflation in certain commodity categories, and a difficult comparison to last year’s hurricane recovery and rebuilding efforts,” said president/CEO Robert Niblock.

Despite the “challenging sales environment for home improvement,” Niblock said that Lowe’s continued to gain market share in key product categories and enjoyed “solid performance” from its new stores.

“We believe many external headwinds will exist through the balance of the year and the first half of fiscal 2007, but as we look to the future, we are confident that solid longer-term drivers of our industry remain,” he said. “We will capitalize on this opportunity through ongoing new store expansion and continued investment in existing stores through product resets and re-merchandising projects, while actively managing controllable expenses.”

Lowe’s opened 49 new stores during the third quarter, representing a 13.4 percent increase in retail selling space year-over-year, and bringing its store count up to 1,330 as of early November. Looking ahead, the company plans to open another 58 stores during the current quarter, but is expecting a comparable store sales decline of 4 to 6 percent.