Lowe’s earnings for the fiscal second quarter dropped by 10%, as the retailer of home-improvement products saw margins squeezed. Same-store sales dropped slightly. Robert Niblock the company’s CEO said that the quarterly results did not reach expectations. However, he said he has confidence in the company’s strategy and in its employees. He expressed that he understood there was a great deal of change the organization had asked of its workers as the business is being transformed.
Projections for the year were cut by the company, with earnings now expected to be $1.64 per share on sales that will be flat, versus previous estimates of $1.73 to $1.83 per share on a sales increase of up to 2%.
Lowe’s is the country’s second largest retailer for home improvement and has been going through a reshaping of its operations trying to boost its profits and compete on a better basis with Home Depot. The company started a strategy of everyday low prices, has started to invest in e-commerce and modify its in-store operations. The company wants to make online sales more seamless and focus more going forward on customer service.
Lowe’s has had successful growth in Canada, as it has increased the number of stores on a steady basis, though slower than it had originally expected. Lowe’s also said that if the deal would have been accepted by Rona, then they would have become Canada’s number one retailer for home improvements.
Lowe’s reported profits of $747 million for the quarter that ended August 3, compared with profits of $830 million during the same quarter a year ago. Sales fell to $14.25 billion, a slide of 2%.
