N.C. - Lowe's, the nation's No. 2 appliance chain, said second-quarter net
earnings fell 19 percent to $759 million due to the weak economy and soft demand
for home-improvement products.
the three months, ended July 31, slipped 4.6 percent to $13.8 billion, and comp-store
sales declined 9.5 percent, the company reported.
consumer confidence, unseasonable weather in core markets, and restrained
customer spending compared to last year's fiscal stimulus-aided results led to lower-than-expected
sales in the second quarter," chairman/CEO Robert Niblock said. "Cautious
consumers remain reluctant to take on discretionary projects until signs of
economic improvement are more evident."
response to the challenging economic environment, the No. 2 home-improvement
chain will cut back next year's new store openings to between 35 and 45, which
added a pretax charge of $48 million for the quarter.
weak sales, Lowe's gained market share and achieved "reasonable earnings" during
the quarter due to sound execution, disciplined inventory management and solid
expense control, Niblock said.
customer traffic is stabilizing, he said, and indicators suggest that a
bottoming in housing and the broader economy is underway, Lowe's is projecting
comp-store declines of 6 percent to 10 percent for the current quarter and is
maintaining a "cautious outlook" for second-half sales.
opened 18 stores through July 31, bringing its store count to 1,688 locations
in the United States and Canada.