NEW YORK - Lowe's Cos Inc (LOW.N), the second-largest U.S. home improvement chain, posted a 30 percent drop in quarterly profit as consumers put off big renovations as the U.S. housing market remains sluggish, sending shares down 2.1 percent in premarket trading.
But the North Carolina-based chain gave a fourth-quarter profit forecast that could beat Wall Street expectations, noting that it was starting to see signs of improvement in some of the hardest-hit housing markets, including California and Florida.
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, Lowe's Chief Executive Robert Niblock said in a statement.
Lowe's profits fell to $344 million, or 23 cents per share, in the third quarter that ended on Oct. 30, from $488 million, or 33 cents per share, a year earlier.
Those results fell just short of analyst expectations of 24 cents per share, according to Thomson Reuters I/B/E/S.
Sales during the quarter fell 3 percent to $11.37 billion, slightly above expectations of $11.28 billion. Same store sales, or sales at stores open for at least a year, fell 7.5 percent.
Lowe's, like bigger rival Home Depot Inc (HD.N), has suffered badly in the U.S. housing slump. In September, Lowe's disappointed investors with a cautious forecast for its next fiscal year and said future growth would be fueled by expansion in underserved markets and overseas.
Home Depot is due to report results on Tuesday.
Lowe's took an optimistic view of the fourth quarter and forecast that profits would range between 9 cents and 13 cents per share, which could beat analysts' expectations of a 10 cent profit per share.
Lowe's said it expects total sales in the last quarter to be flat, while same-store sales, or sales at stores open for at least one year, would fall between 2 percent and 6 percent.
It plans to open 13 new stores in the fourth quarter. Lowe's opened 12 stores and closed one during the third quarter.