Beset by an uncertain economy and costs from store closings, Mooresville-based Lowe's, Inc. said Monday that its profits third-quarter were halved and offered a downbeat forecast for the rest of the year.
Lowe's reported a $225 million profit, down 44 percent from the same period a year ago. Diluted earnings per share fell to 18 cents, down from 29 cents in the third quarter last year.
Despite the gloomy top-line numbers, revenue still ticked up at the retailer. Sales were $11.9 billion for the quarter, up from $11.6 billion last year. But sales at stores open a year or more, considered an important measure of a retailer's health, rose only 0.7 percent for the quarter, and are down about 1 percent for the year so far, Lowe's said.
"Our performance is not at the level we expect relative to the market," said CEO Robert Niblock in a statement. He said the company is focused on "right sizing" the business, improving shoppers' experience and getting products to market more quickly.
But that right-sizing was largely to blame for the company's poor performance, Lowe's said. The company's closure of 27 stores it said were underperforming, and other discontinued projects, shaved off $336 million in earnings. That equated to a loss of 17 cents a share in earnings, Lowe's said.
Lowe's also cut plans to open new stores by more than 50 percent over the coming years. The company now expects to open 10 to 15 new stores from 2012 on.
For the full year, Lowe's said it now expects sales to rise between 2 and 3 percent, with about 1.5 percentage points of that rise attributable to 2011 being a 53-week fiscal year for the company. Sales at stores open for a year or more are expected to fall about 1 percent, Lowe's said.
Lowe's, the country's second-largest home improvement retailer, has lagged its larger rival Home Depot for several quarters now. Atlanta-based Home Depot went through its own painful rounds of poor performance and store closures several years ago, while Lowe's was flying high and expanding.
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