Retailer Lowe's Cos reported lower quarterly profit on Monday and forecast full-year earnings below Wall Street estimates, citing challenging days to come as the slumping housing market hurts sales.
The second-largest home improvement retailer behind Home Depot also pared its store growth plans for the year. Its shares were down 2.5 percent to $23 in trading before the opening bell.
Earnings came to $408 million, or 28 cents a share, for the fourth quarter ended February 1, down 33 percent from $613 million, or 40 cents a share, a year earlier.
Profit was better than the 25 cents a share analysts expected, according to Reuters Estimates.
Sales edged down to $10.38 billion from $10.41 billion a year earlier. Analysts expected sales of $10.6 billion for the quarter, according to Reuters Estimates. Sales at stores open at least a year, or same-store sales, fell 7.6 percent.
The home improvement sector has suffered as consumers pulled back spending on home renovations in the face of declining home values, lower sales and tighter credit requirements.
Home Depot is expected to report lower quarterly results on Tuesday.
Mooresville, North Carolina-based Lowe's forecast profit of 38 cents to 42 cents a share for the current first quarter and $1.50 to $1.58 for the full year. Analysts expect 44 cents for the first quarter and $1.74 for the year, according to Reuters Estimates.
We know the next several quarters will be challenging on many fronts as industry sales are likely to remain soft, Lowe's Chairman and CEO Robert Niblock said in a statement.
The retailer said it plans to open 120 stores in 2008. In September, it had said it would open 135 to 145 stores in North America annually from 2008 through 2010. During its 2007 fiscal year, Lowe's opened 153 stores, including about four relocations.
(Reporting by Karen Jacobs; Editing by Mark Porter)