Lowe’s Cos., the second largest U.S. home improvement retailer, said on Monday it expects to deliver profit for the current year at or near the low end of its previous forecast as a cooling U.S. housing market weighs on consumers.
The company, which holds its analyst meeting in Virginia on Tuesday, said current sales were running below expectations, and added that “near term pressures” on consumers led to a more cautious outlook for the 2006 second half.
Still, it expects per-share earnings at or near the low end of a range of $2 to $2.07. Analysts currently expect profit of $2.01 a share for the full year, according to Reuters Estimates.
Lowe’s, based in Mooresville, North Carolina, cut its full-year profit forecast in August as lower U.S. home sales and higher borrowing costs weighed on consumer spending.
The retailer said it expects per-share earnings to rise 10 to 14 percent for 2007 and 12 to 16 percent in 2008. For the 2007 fiscal year, analysts expect $2.24 a share, which would represent a rise of about 11 percent over expected 2006 profit.
The home improvement sector has benefited from record U.S. home sales and mortgage refinancings but now faces tougher comparisons as growth slows. Lowe’s shares have fallen 13 percent this year, split adjusted, while Home Depot is off 10 percent.
Lowe’s, which is expanding to big U.S. cities such as New York, said it plans to open about 155 and 150 stores in 2007 and 2008, respectively. It expects sales to rise 10 to 13 percent in 2007 and 11 to 13 percent in 2008.
In August, Atlanta-based Home Depot, the largest U.S. home improvement retailer, said it expects profit and sales for this year would rise at the low end of its previous forecast. The industry leader had forecast a rise of 10 to 14 percent in earnings per share.