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Lowe's reaffirms 2009 profit, sales outlook

Lowe's is reaffirming its fiscal 2009 profit and sales forecasts and may write off up to $100 million during the second half of the year.
/ Source: The Associated Press

Lowe's Cos. on Tuesday reaffirmed its fiscal 2009 profit and sales outlook, but nation's second biggest home improvement retailer warned it may need to write off up to $100 million during the second half of the year.

The Mooresville, N.C.-based company still expects full-year earnings of $1.13 to $1.21 per share, with sales down about 3 percent for the fiscal year ending Jan. 29.

Based on year-ago sales of $48.2 billion, that implies revenue around $46.78 billion.

Analysts expect 2009 net income of $1.20 per share on higher revenue of $46.86 billion.

Sales at established stores, an important retail metric called same-store sales, are expected to decline between 7 percent and 9 percent, Lowe's said.

Lowe's also said it may take up to $100 million in operating store impairment charges but has not adjusted its 2009 outlook due to the uncertainty of the potential charges.

The retailer said it expects 2010 earnings between $1.24 and $1.34 a share for the fiscal year ending Jan 28, 2011. Sales are expected to rise between 3 percent and 4 percent, and sales at established stores will rise around 1 percent, Lowe's said.

Analysts had been looking for 2010 earnings of $1.34 a share and revenue of $48.5 billion.

In a statement, Chief Executive Robert A. Niblock said that more consumers are tackling home improvement projects on their own, given the weak economy.

"We continue to invest in our business and drive operating efficiencies to become a more efficient company and better serve the needs of home improvement customers," Niblock said in a statement.

Lowe's also said it is closing one unprofitable store in Milwaukee, but opening between 62 stores and 66 stores in 2009. In fiscal 2010, Lowe's plans to open between 35 stores and 45 stores.

Lowe's will offer more information at its annual conference in Charlotte, N.C., on Tuesday, with presentations by Chief Financial Officer Robert F. Hull, Jr., among other executives.