Lowe's (LOW) echoed its chief competitor, Home Depot (HD), on Monday, forecasting a sales slowdown in the back half of the year as the U.S. housing boom winds down.
But unlike Home Depot, which saw its shares rise last week after its profit report narrowly exceeded forecasts, Lowe's shares lost ground after the No. 2 U.S. home-improvement chain reported a weaker-than-expected 11% gain in second-quarter earnings and cut its guidance for the full year. For the quarter ended Aug. 4, Lowe's earned $935 million, or 60 cents a share, up from the year-ago $839 million, or 52 cents a share. Analysts, on average, expected earnings of 61 cents a share, according to Thomson First Call. Meanwhile, Lowe's now expects to record earnings of $2 and $2.07 a share for the year, down from its previous forecast for earnings of $2.07 to $2.11 a share. The company expects same-store sales, measuring sales at stores open for at least a year, to grow 2% to 3%. That's down from its previous forecast for same-store sales growth of 4% to 5%. "Near-term pressures on the U.S. consumer have led to a more cautious outlook for the balance of the year," CEO Robert Niblock said in a statement. "As we enter the second half of 2006, we remain committed to providing the knowledgeable and attentive service customers have come to expect from Lowe's while prudently managing expenses in the current sales environment.TheStreet Premium Services For Personal Service: 877-471-2967
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