Lowe's Net Falls 10 Percent in Second Quarter
August 20, 2012,
MOORESVILLE, N.C.-Declines in sales and margins, along with a pretax charge related to reduction in staff, led Lowe's to a 10 percent drop in second-quarter net income, to $747 million.
Robert Niblock, Lowe's chairman, president and CEO, said the quarter, which ended on Aug. 3, "fell short of our overall expectations." Net sales slipped 2.1 percent to $14.2 billion, which included a decrease of 0.2 percent in U.S. same-store sales. The sales decline was instrumental in reducing Lowe's gross margin in the quarter by 56 basis points, to 33.9 percent.
Based on the second-quarter results, Lowe's now expects total sales for the fiscal year to be flat in comparison with last year's sales, with a same-store-sales increase of about 0.5 percent. Expressing confidence in the company's strategy and employees, Niblock added that "we fully understand that we must improve our level of execution."