Weak forecast from Lowe’s
Lowe’s (LOW) says the poor economic picture continues to hold down sales. The Mooresville, N.C., home improvement retailer posted a mixed first quarter and guided earnings below Wall Street’s expectations for the year, citing a pullback by cash-strapped consumers. Lowe’s made $607 million, or 41 cents a share, down from the year-ago $739 million, or 48 cents a share. Sales dropped to $12 billion from $12.17 billion a year earlier. Analysts surveyed by Thomson Financial were looking for a 40-cent profit on revenue of $12.36 billion.
“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 CEO Robert A. Niblock. “The generally poor economic outlook, including well-known housing pressures, rising food and fuel prices and a more negative employment picture eroded consumer confidence and impacted discretionary purchases for the home.”
The company said it expects to make between $1.45 and $1.55 a share for the year, compared with the $1.54-a-share Wall Street estimate. Lowe’s expects same-store sales to drop 6%-7% for the year.
Lowe’s shares have fallen sharply from their highs around this time last year as the economy has cooled, but the stock is up 10% this year and 20% since the mid-March panic tied to the near collapse of Bear Stearns (BSC). An early preopen selloff - shares dropped 5% in premarket trading - shows those gains will be tested when trading opens Monday.
As the market dips, Lowe’s has a rare opportunity to seize market share from Home Depot.
As a property owner who is renovating two homes and a commercial building simultaneously, I can say that the customer service at the Lowe’s in Santa Fe is far superior to the customer service at Home Depot just up Cerrillos Road. The employees at Lowe’s actually know what they are doing, offer valuable advice and are truly friendly and helpful — the exact opposite of the generally dismal service one gets at Home Depot (the only bright spot being HD’s excellent flooring department). It’s obvious that the management at Home Depot is doing nothing to adequately train their employees or maintain basic standards of customer service — the employees at HD are often rude, lazy and NEVER call you back… even to confirm a special order.
HD’s CEO Frank Blake likes to talk about their “incredible customer service”… it’s a total joke. Lowe’s should focus on elevating it’s already excellent customer service far beyond the reach of competitors and put Home Depot out of it’s misery.
Sheesh, can’t they look past the “slowdown” like everyone else is? Where’s the silver lining?
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I used to think Lowe’s was the greatest thing for home improvement until they proved their disregard for the safety of the neighbors adjacent to their new superstore in Schertz, Texas.
They added fill and steeply graded their 20 acre lot to a sharp drop averaging 10 feet down to the small, existing 6′ wide x 2′ deep culvert which protects our homes. To carry ALL the runoff from their 138,684 square foot building (482,705 square foot impervious cover) they inserted two drain pipes 2′ high by 4′ wide at a 45 degree angle into the little culvert.
So when you hear it has finally rained in South Central Texas, sell your Lowe’s stock because our homes will be washed away due to their poor engineering.