Home improvement retailer Lowe’s (LOW) reported lower-than-expected quarterly sales and profit and cut its full-year earnings forecast, sending its shares down in premarket trading on Wednesday.
Analysts had expected a stronger performance due to the strength in the housing market and higher spending on home renovations.
Larger rival Home Depot (HD) boosted its full-year earnings forecast on Tuesday.
Lowe’s, whose shares were down 6.7% in premarket trading, earned $1.37 per share, excluding items, below the average analysts’ estimate of $1.42, according to Thomson Reuters I/B/E/S.
Net sales rose 5.3% to $18.26 billion, below the $18.45 billion analysts had expected. Home Depot’s sales rose 6.6%.
Lowe’s said the cut in its earnings forecast reflected its acquisition of Canada’s Rona.
Sales at Lowe’s stores open more than 13 months rose 2%, compared with the 4.1% growth expected by analysts polled by research firm Consensus Metrix. Home Depot’s same-store sales rose 4.7%.
Net income rose to $1.17 billion, or $1.31 per share, in the second quarter ended July 29 from $1.13 billion, or $1.20 per share, a year earlier.