Like most home channel companies struggling with low consumer confidence and a downtrodden housing market, Lowe’s recorded a weaker fiscal first quarter, according to financial results released today.
Earnings declined 17.9 percent to $607 million, down from $739 million in the same period last year. Sales fell 1.3 percent to $12 billion from $12.2 billion in last year’s first quarter.
Comparable-store sales declined a full 8.4 percent.
"The challenging sales environment we have been experiencing for the past six quarters continued into the first quarter of 2008, and increasing financial pressures on consumers resulted in top-line sales that fell below our plan," said Robert Niblock, Lowe's chairman and CEO, in a statement.
Niblock said the “generally poor economic outlook,” alongside housing pressures, rising fuel costs, a “more negative employment picture” and higher food prices all contributed to weak consumer confidence that hurt the retailer. Those negative factors also hurt “discretionary purchases for the home,” he said.
Still, “Lowe's continued to gain market share in the quarter, and diligent expense control helped us achieve respectable earnings in spite of the headwinds facing the industry," Niblock said.
In the first quarter, Lowe's opened 20 new stores. As of May 2, the retailer operated 1,554 stores in the United States and Canada.
In the second quarter, the company said it expects to open 23 new stores. Lowe’s projects a sales increase of about 1 percent in the second quarter, alongside a comparable-store sales decline of 6 percent to 8 percent.