Lowe's sales miss estimates as short spring hurts
By Sruthi Ramakrishnan
(Reuters) - Home improvement chain Lowe's Cos Inc (LOW.N: Quote) reported a lower-than-expected quarterly profit and cut its full-year earnings forecast, hurt by a shorter spring in the northern United States and fewer big-ticket purchases at its stores.
Lowe's shares were down 6.8 percent in late morning trading on Wednesday.
While Home Depot's sales got a big boost from big-ticket items such as appliances and roofing products, Lowe's reported average sales.
Number of transactions worth over $500 rose 2.9 percent in the second quarter ended July 29, Lowe's said. In contrast, Home Depot reported a 9.5 percent rise in big-ticket purchases worth over $900.
Sales in northern United States were challenged by a short spring, which hindered outdoor projects, Lowe's Chief Customer Officer Mike Jones said on a conference call.
An early spring this year also led to a number of outdoor projects being moved to the first quarter from the traditional second quarter, hurting Lowe's comparable sales, which fell 2.8 percent in May.
Lowe's gets a bigger chunk of its revenue from outdoor business, which benefited from a warmer-than-usual March and April, compared with Home Depot, Edward Jones analyst Robin Diedrich said.
"That has come back to haunt them here in the second quarter," Diedrich added. Continued...