Monday the No. 2 home-improvement retailer Lowe's Cos . reported that its third-quarter profit fell 30 percent as customers continued to delay large purchases amid a weak economy. But Lowe's said some of the hardest hit home markets are stabilizing.
Profit in the quarter ended Oct. 30 was $344 million, or 23 cents per share, down from $488 million, or 33 cents per share, in the same quarter last year. Results in the latest quarter included one-time costs related to closing some stores and no longer pursuing some future stores, as well as a tax benefit. Excluding those items, profit was 24 cents per share, matching analyst expectations according to a poll by Thomson Reuters.
Revenue edged down 3 percent to $11.38 billion from $11.73 billion, narrowly beating an average analyst estimate of $11.28 billion.
Sales in stores open at least one year fell 7.5 percent in the quarter. The metric is considered a key measurement of retailer health , The Associated Press reports.
It was also reported, total revenue fell 3 percent to $11.4 billion in the three months ended Oct. 30, beating estimates. Sales of existing U.S. homes surged a record 9.4 percent in September as Americans took advantage of a tax credit for first-time buyers.
“We are beginning to see signs of improved performance in some of the hardest-hit housing markets including California, Florida and areas of the desert Southwest,” Chairman and Chief Executive Officer Robert Niblock said in the statement. Shoppers continue to hold back on large purchases, he said.
Sales in stores open at least 13 months fell 7.5 percent, compared with a 9.5 percent drop in the second quarter. The company is projecting a decline of as much as 6 percent in the current quarter, Bloomberg reports.
Meanwhile, analysts had most recently forecast earnings of 24 cents on $11.28 billion in sales, including an 8.2% drop in same-store sales. In August, the company had forecast earnings from 21 cents to 25 cents.
Gross margin rose to 34.2% from 34%.
The company opened 12 stores and closed one during the most-recent quarter and said it expects to open about 13 during the current quarter.
Also, Lowe's predicted fourth-quarter earnings of 9 cents to 13 cents on flat sales. Analysts polled by Thomson Reuters were projecting a 10-cent profit and a 0.8% drop in sales.
It continues to expect to grow square footage by 4%, which includes 64 new stores, The Wall Street Journal reports.