Lowe's net, forecast fall short as store openings get trimmed

Lowe's shares surrendered 10% to close at $20.47. In a broadly lower market for equities, shares of larger rival and Dow Jones Industrial Average component Home Depot Inc. /quotes/comstock/13*!hd/quotes/nls/hd (HD 26.37, +0.26, +0.10%) , scheduled to report financial results on Tuesday, dropped 3.8%.

"Nobody thinks it's going to take a turn for worse," said analyst Joe Feldman of Telsey Advisory Group in an interview. "There's just no pick-up yet for spending. Foreclosure rates continued to accelerate and housing prices year over year are still down. Home Depot may give similar cautious outlooks."

'The decision to cut bait on several projects is an acknowledgement of the challenging environment that is likely to persist for some time.'

Lowe's net income dropped to $759 million, or 51 cents a share, for the three months ended July 31, from $938 million, or 63 cents, in the year-earlier second quarter.

Sales fell 4.6% to $13.84 billion from the prior year's $14.51 billion. On a same-store basis, quarterly sales declined 9.5%, missing management's previous projection of a decline of 4% to 8%, the Mooresville, N.C.-based company said.

Most analysts had expected those sales, a key retail performance metric because it excludes results from new and closed locations, to decline between 6% and 7%.

Spending on home-improvement projects "remained weak in the quarter but even in this weak environment we were disappointed with the magnitude of erosion," said Chief Executive Robert Niblock on a conference call, adding that comparable sales for items costing more than $500 dropped 16% while those for items less than $50 were "slightly positive."

"Consumers are only taking on home-improvement projects that they feel are absolutely necessary and are postponing discretionary projects until clarity about the future returns," he added link....