Lowe's sees 18 percent drop in net income

Lowe's Cos. Inc.'s net income for the first quarter of fiscal 2008 fell nearly 18 percent to $607 million, or 41 cents per fully diluted share, from the same period last year, when it earned $739 million, or 48 cents per share.

Sales at the Mooresville-based home-improvement retailer declined 1.3 percent in the quarter that ended May 2 to $12 billion from $12.2 billion in the year-ago period.

Sales at stores in operation for at least a year dropped 8.4 percent.

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"The challenging sales environment we have been experiencing for the past six quarters continued into the first quarter of 2008, and increasing financial pressures on consumers resulted in top-line sales that fell below our plan," says Robert Niblock, Lowe's chairman and chief executive. "The generally poor economic outlook, including well-known housing pressures, rising food and fuel prices and a more negative employment picture eroded consumer confidence and impacted discretionary purchases for the home."

During the quarter, Lowe's (NYSE:LOW) opened 20 stores. As of May 2, Lowe's operated 1,554 stores in the United States and Canada. The stores have 176.4 million square feet of retail selling space, an 11.1 percent increase from last year.

Lowe's plans to open 23 stores in its second quarter. Although the company forecasts total sales will grow 1 percent during the quarter, it expects same-store sales to drop 6 percent to 8 percent.

"Fiscal 2008 will be a challenging year on many fronts," Niblock says, "but we remain focused on what we can control and will continue managing for long-term success and pursuing opportunities as they arise in the current environment."

Lowe's, founded in 1946, is the second-largest home-improvement retailer in the world.