MOORESVILLE, N.C.–Lowe’s Cos. cited the challenging housing market and retail environment for its 33.4 percent fall in net quarterly earnings, and lower-than-expected comparable-store sales.
For the fourth quarter ended Feb. 1, Lowe’s reported net earnings of $408 million, on quarterly sales of $10.4 billion, a decline of 0.3 percent from the prior-year period. Comp-store sales declined 7.6 percent for the fourth quarter and 5.1 percent for fiscal 2007. Lowe’s fiscal year sales increased 2.9 percent to $48.3 billion.
“Fourth-quarter and fiscal year 2007 sales fell short of our plan as we faced an unprecedented decline in housing turnover, falling home prices in many areas and turbulent mortgage markets that impacted both sentiment related to home improvement purchases as well as consumers’ access to capital,” Robert A. Niblock, Lowe’s chairman and chief executive officer, said in a statement.
Niblock warned that “the next several quarters will be challenging on many fronts as industry sales are likely to remain soft.”
During the quarter, Lowe’s opened 72 new stores, including two relocations. As of Feb. 1, Lowe’s operated 1,534 stores in the United States and Canada.
Lowe’s outlook for fiscal 2008 remains conservative, with a predicted increase of 3 percent in total sales, an expected decline of 5 percent to 6 percent in comp-store sales, and a total of about 120 new stores in 2008.
During the first quarter of 2008, Lowe’s expects to open approximately 21 new stores. Further, the chain expects its total sales to increase approximately 2 percent, while comp-store sales are expected to decline 5 to 7 percent, company officials said.