NEW YORK — No. 2 home-improvement retailer Lowe's on Monday said second-quarter earnings fell 19 percent on weaker-than-expected sales, adding fresh fuel to doubts about the ability and willingness of consumers to lead the U.S. economy out of recession.
Lowe's results Monday were a stark contrast to the previous quarter, when the company said it saw fresh signs of a consumer resurgence. Monday's release cited continued consumer weakness.
"Wavering consumer confidence, unseasonable weather in core markets, and restrained customer spending compared to last year's fiscal stimulus-aided results led to lower-than-expected sales in the second quarter," Robert A. Niblock, Lowe's chairman and chief executive, said in a statement.
The No. 2 home-improvement retailer said profit fell to $759 million, or 51 cents a share, from $938 million, or 64 cents a share, last year. Revenue fell 5 percent to $13.84 billion from $14.51 billion last year.
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Analysts predicted a profit of 54 cents a share on revenue of $14.35 billion. Lowe's had forecast earnings of 51 cents to 55 cents a share.
Sales in stores open at least one year, a key retail metric known as same-store sales, fell 9.5 percent.
Lowe's, like much of the housing and home-improvement industry, has been battered by a weak real estate market, rising unemployment and weak consumer confidence.
Niblock said in an interview that the second-quarter results probably do not signal a shift in consumer behavior. Rather, weather was unseasonably cool and wet in the Northeast, and fiscal-stimulus checks a year ago aided sales more than the company expected, Niblock said.
The weather also seriously crimped air-conditioner sales, the company said, but because of a hotter August, air conditioners are now selling "at a pretty good clip," chief operating officer Larry Stone said.
The company said it is scaling back expansion plans in 2010. The company now expects to open 35 to 45 stores during the year. It also said it is taking a $48 million charge for canceling plans to open about 80 new stores that had been planned over the next few years.
Janney Montgomery Scott analyst David Strasser said the scale-back was positive.
"We had modeled 60 to 65 stores versus Lowe's new guidance of 35 to 45 stores," he wrote. "This is good for the overall industry."
Niblock said despite near-term pressure, there are signs of a "bottoming process" in housing and the broader economy.
For the third quarter, Lowe's predicted earnings of 21 cents to 25 cents a share, below analyst expectations, on a 2 to 5 percent sales drop. Lowe's expects yearly sales to fall about 3 percent on earnings of $1.13 to $1.21 a share, also below expectations.
Its rival Home Depot is set to report second-quarter earnings on Tuesday.