Lowe’s (LOW), the second-largest home-improvement retailer, saw first-quarter profits fall 18%, roughly in-line with analyst estimates: EPS of $0.41 cents vs. consensus of $0.40. More importantly, however, Q1 revenue missed consensus and Lowe’s cut guidance again, suggesting that shockwaves from the housing market continue.
Lowe’s now forecasts 2008 EPS of $1.45 to $1.55 a share, implying a mid-point that is well below the $1.54 consensus. The chain now sees sales growth of only 1% this year, down from the 3% gains it forecast earlier this year.
With sales of previously owned homes (which account for 85% of the housing market) down for the seventh month in eight and single-family housing starts at a 17-year low, Lowe’s had no choice but to forecast further declines. With no new homes to remodel or improve, Lowe’s, and other home improvement retailers such as Home Depot (HD), are likely to suffer throughout the year.