Lowe’s plans smaller stores to lift profit

Home-improvement chain Lowe’s Cos. told investors Wednesday that it was scaling down the size of most new stores and eyeing even smaller locations in some rural areas as it tries to operate more efficient sites.

Executives at the company’s annual analyst and investor conference said that new stores in medium and large markets would be about 103,000 square feet -- about 19,000 square feet smaller than many of its locations today.

The new format will help Lowe’s -- hard hit by the economy and weak housing industry -- cut capital outlay costs by almost $2 million per store.

Citi Investment Research analyst Deborah Weinswig said new compact stores would probably produce higher returns for Lowe’s as it tries to control expenses to boost profit.