Lowe's Follows Leader

"They're both operating in a much more challenging environment, although Lowe's seems to be weathering the storm a touch better," says Craig Johnson, president of retail consultant Customer Growth Partners. "Consumers are being a little more cautionary than they have been in the past. They're keeping their powder dry and trying to see what happens in the housing market."

For the third quarter ended Nov. 3, Lowe's earned $716 million, or 46 cents a share, up from the year-ago $646 million, or 40 cents a share. Revenue rose to $11.21 billion from $10.59 billion a year earlier, while same-store sales dropped 4%.

Analysts surveyed by Thomson First Call predicted earnings of 43 cents a share and sales of $11.5 billion.

Looking ahead, Lowe's forecast fourth-quarter earnings of 36 cents to 38 cents a share, below Wall Street's 41-cent estimate. The retailer expects same-store sales to fall 4% to 6% from a year ago. Total sales are expected to slip 4% from last year's figure of $10.8 billion.

For the full year, Lowe's cut its earnings forecast to $1.95 to $1.97 a share from an already lowered view of $2 to $2.07 a share. Analysts, on average, target earnings of $1.97 a share.

Lowe's expects full-year sales to rise 9% from the year-ago total of $43.2 billion. Same-store sales are expected to be flat.