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Lowe’s 2nd-quarter results miss Wall Street’s view; lowers fiscal 2012 guidance

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FILE-In this Tuesday, June 19, 2012 photo, Lauren Jonker, opens up a dishwasher on display at a Lowe\'s store in Atlanta. Unlike its no. 1 rival Home Depot, Lowe’s isn’t sharing in an improving housing market. The nation’s second largest improvement retailer cut its full-year-earnings and revenue forecasts Monday, Aug. 20, 2012, after posting a 10 percent drop in second-quarter net income. Revenue at stores opened at least a year, a key yardstick for measuring the health of the retailer, declined 0.4 percent. (AP Photo/David Goldman, File)
Original Publication Date: August 20, 2012 12:18AM
Publication Updated: January 9, 2025 5:05AM

MOORESVILLE, N.C. – Lowe’s says its fiscal second-quarter net income dropped 10 per cent, hurt by a timing shift and a charge tied to job cuts.

The home-improvement retail chain also lowered its fiscal 2012 earnings and revenue outlooks on Monday.

The world’s second-biggest home improvement retailer after Home Depot has run into stiff opposition to its plans for making an major expansion in Canada.

Lowe’s has said it would like to acquire Rona Inc. (TSX:RON), Canada’s largest home-improvement retail chain, but it has been rejected by the company and faces opposition from the province of Quebec.

Lowe’s Cos. (NYSE:LOW) earned US$747 million, or 64 cents per share, for the period ended Aug. 3. That’s down from $830 million, or 64 cents per share, a year ago.

Fiscal 2012 has one less week than last year. The timing shift lowered earnings by about three cents per share.

Removing a charge tied to previously announced job cuts and the impact of the timing shift, earnings were 68 cents per share.

Revenue fell 2 per cent to $14.25 billion from $14.54 billion. Lowe’s said that the timing shift accounted for 1.8 percentage points of the decline.

Analysts polled by FactSet expected earnings of 70 cents per share on revenue of $14.44 billion.

Revenue at stores open at least a year dipped 0.4 per cent and edged down 0.2 per cent at U.S. locations. This figure is a key gauge of a retailer’s health because it excludes results from stores recently opened or closed.

For fiscal 2012, Lowe’s now expects earnings of about $1.64 per share and revenue to be about flat with 2011’s $50.21 billion. It previously predicted earnings of $1.73 to $1.83 per share, with revenue rising 1 per cent to 2 per cent.

Wall Street foresees full-year earnings of $1.80 per share on revenue of $50.58 billion.

Last week Lowe’s rival Home Depot Inc. reported that its second-quarter net income rose 12 per cent as customer spent more during the period on sprucing up their homes.

Lowe’s, based in Mooresville, N.C., had 1,748 stores in the U.S., Canada and Mexico at the end of the quarter.

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