Times Wire Reports

The dismal housing market dragged down fiscal fourth-quarter profit at Lowe’s Cos. by 60%, and executives at the home-improvement chain said Friday that they saw little hope of a substantive fix from a federal effort aimed at helping struggling homeowners.

To cope in the worsening recession, Lowe’s said it was further cutting back the number of stores it planned to open in 2009 and offered a profit forecast for the year that was short of Wall Street’s expectations. The news sent the company’s shares down nearly 7%.

Lowe’s earned $162 million, or 11 cents a share, in the three months ended Jan. 30. That’s down from $408 million, or 28 cents, during the same period last year. Revenue slid 4% to $9.98 billion.

The latest results narrowly missed analysts’ estimates, thanks in large part to the Mooresville, N.C., company’s decision to offer deep discounts earlier than planned during the weeks before Christmas -- a decision that cut into profit margins but helped Lowe’s clear out inventory.

Lowe’s said it planned to open 60 to 70 new stores in 2009, a 15% decrease from its estimates in the fall. That means it will open 40% fewer stores in 2009 than the 115 stores it added last year.


Lowe’s now expects to earn $1.04 to $1.20 a share in 2009, below the $1.27 a share analysts expected. The company predicts that full-year revenue will range from a 2% decrease to a 2% increase, while same-store sales are forecast to decline 4% to 8%.

Lowe’s shares fell $1.12, or 6.6%, to $15.86.