Lowe's Lumbers as Housing Slows

"Expectations for an orderly slowdown in the housing market, moderate income growth and a solid employment picture are stabilizing forces for the consumer," Niblock concluded. "I am confident the longer term drivers of our industry, including the required ongoing maintenance of the 124 million existing homes in the U.S., favorable demographics and solid household formation trends, combined with our customer focused culture, will ensure our continued success."

Lowe's revised outlook for the year is in line with Wall Street's expectations for a profit of $2.05 a share, but shares of the home-improvement chain were selling off as investors factored in the risk that the continued slowdown in the housing market will end up being less orderly than Niblock and others have predicted. Shares of Lowe's recently were down $1.27, or 4.3%, to $28.24. Home Depot shares fell 68 cents, or 2%, to $34.09.

The selling comes after shares of Lowe's have lost 15% of their value this year, as the U.S. housing market, which is credited by economists as being a key source of wealth for consumers in recent years, has showed continued signs of softening. Most recently, the National Association of Home Builders reported last week that its index of homebuilder confidence concerning sales activity fell to a 15-year low. Meanwhile, the Commerce Department said housing starts fell 2.5% in July.