Lowe’s, the No. 2 U.S. Home improvement chain, reported third-quarter profit and sales that missed analysts’ estimates as fewer customers visited its stores, and the retailer cut its full-year profit forecast for the second time.
The company’s shares tumbled 5.87% to $65 in premarket trading on Wednesday.
“While we expected moderation in the second half of the year, traffic slowed more than we anticipated in August and September before improving in October, which put pressure on our profitability in the quarter,” chief executive Robert Niblock said in a statement.
Lowe’s net sales rose 9.6% to $15.74 billion in the third quarter ended Oct. 28. But that missed analysts average estimate of $15.86 billion, according to Thomson Reuters I/B/E/S.
Sales at Lowe’s stores open more than 13 months rose 2.7 %, less than the 3.2 percent-growth expected by analysts polled by research firm Consensus Metrix.
Lowe’s net income fell to $379 million, or 43 cents per share, from $736 million, or 80 cents per share.
The latest quarter included non-cash pretax charges of $462 million related to the wind down of a joint venture, write-offs for canceled projects and impairments related to reassessment of its Orchard Supply Hardware business.
Excluding items, Lowe’s earned 88 cents per share, below the average analyst estimate of 96 cents, according to Thomson Reuters I/B/E/S.
Lowe’s cut its full-year earnings forecast to $3.52 per share from $4.06.
The company said it now expects sales to grow 9-10% for the year ending Feb. 3 and comparable sales to increase 3-4 percent.
It had previously forecast sales growth of about 10% and comparable sales growth of about 4%.
Lowe’s larger rival Home Depot reported better-than-expected quarterly results on Tuesday, citing higher traffic and spending. But the company maintained its full-year sales forecast, which disappointed investors.
Lowe’s may have registered some softness in appliances and paint in the quarter, BTIG analysts wrote in a pre-earnings note. Home Depot said appliances was its strongest category.