Lowe's Beats, Warns...

Lowe’s (NYSE:LOW) is the latest company to warn that a sharp decline in consumer spending this fall will hammer holiday-season profits.
The home improvement retailer beat Wall Street’s expectations for the third quarter, making $488 million, or 33 cents a share, for the quarter ended Oct. 31, down from the year-ago $643 million, or 44 cents a share. Analysts surveyed by Thomson Financial were looking for a 28-cent profit.

But, the fourth quarter is looking weak. The company said it expects to make 8 to 16 cents a share for the quarter, below the 18-cent Wall Street estimate. Lowe’s expects sales in established stores to fall between 5% and 10% from a year ago during the quarter. In explaining the bleak outlook, CEO Robert Niblock echoed the likes of retailer Best Buy (NYSE:BBY) and homebuilder Toll Brothers (NYSE:TOL) in pointing to a steep pullback by U.S. consumers. It is also a bad omen for Home Depot (NYSE:HD) who reports tomorrow and has, in the past year been affected to a greater degree than Lowes in the housing slump.

“While falling energy prices and initial signs of stabilization in housing turnover should aid the consumer,” Niblock said, “we saw a decline in sales trends in the last week of October that continued into November as the overall economic outlook deteriorated.”