Lowe's Cos., the second-largest home- improvement retailer, reported an 18 percent drop in first-quarter profit on Monday and lowered its outlook for the year as the retailer faces a challenging sales environment amid a national housing slump.
For the quarter ended May 2, the home-improvement retailer posted net income of $607 million, or 41 cents a share, down from $739 million, or 48 cents a share, a year earlier.
The Mooresville, N.C.-based company said sales fell 1.3 percent to $12 billion in the quarter, while same-store sales decreased 8.4 percent.
Analysts, on average, expected the company to earn 40 cents a share in the first quarter, 56 cents in the second quarter and $1.54 for the year, according to FactSet Research. First-quarter sales missed analysts' estimates of $12.4 billion, according to FactSet.
Lowe's forecast per-share profit of 54 cents to 59 cents for the second quarter and $1.45 to $1.55 for the year with continued declines in comparable-store sales expected.
In February, its outlook for the fiscal year ending January 30 was at $1.50 to $1.58.
The generally poor economic outlook, including well-known housing pressures, rising food and fuel prices and more negative employment picture eroded consumer confidence and impacted discretionary purchases for the home, Lowe's Chairman Robert Niblock said in a statement.
Looking ahead, the Mooresville, N.C., company lowered its guidance for fiscal-year earnings to $1.45 to $1.55 a share on revenue growth of 1 percent, with same-store sales expected to fall 6 percent to 7 percent.
Lowe's larger rival, Home Depot Inc., has also been hurt by the housing and economic downturns. Home Depot will report first-quarter results Tuesday, has been reacting to the economic slowdown by closing stores and scaling back expansion efforts.
Shares of Lowe's fell 3 percent during market trading to $24.12, and Home Depot shares were down 1 percent to $28.81.