Lowe's earnings disappoint, dinging stock

Lowe's lowered its full-year forecast for profit and sales as the company's third-quarter earnings performance disappointed investors and diverged from rival Home Depot's upbeat outlook.

Lowe's (LOW) said Wednesday that it now expects diluted earnings per share of $3.52 for the fiscal year ending Feb. 3, down from a previous projection of $4.06.

The home-improvement retailer also projected sales growth of 3% to 4% at stores open at least a year, down from a previous expectation of 4%.

For the third quarter ended Oct. 28, Lowe's recorded net earnings of $379 million, down 48.5% from the same period a year earlier and missing expectations of $838 million.

The company blamed the worse-than-expected earnings in part on one-time charges, including a $290 million charge connected to the wind down of a joint venture with Woolworths in Australia.

Sales at stores open at least a year rose 2.7% for the period, trailing Home Depot's 5.5% growth.

"Our third-quarter operating results were below our expectations due to slower sales in the first two months of the quarter," CEO Robert Niblock said in a statement. "While we expected moderation in the second half of the year, traffic slowed more than we anticipated in August and September before improving in October, which put pressure on our profitability in the quarter."

The company's stock fell 3% in late-afternoon trading to $67.

Analysts have said Home Depot is disproportionately benefiting from the growing housing market and store-to-Web connections, while Lowe's garden business is sagging.

Net sales rose 9.6% to $15.7 billion for the quarter, missing expectations of $15.8 billion.

Follow Paste BN reporter Nathan Bomey on Twitter @NathanBomey.