Lowe's profit slump weighs on retailers (Market Watch)

By William Spain
NEW YORK (MarketWatch) -- Retail stocks traded slightly lower Monday, weighed down at least in part by disappointing financial reports from home-improvement giant Lowe's Cos.
The S&P Retail Index ($RLX : s&p retail index-rlx
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Last: 520.69-0.19-0.04%

4:29pm 05/21/2007

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$RLX520.69, -0.19, 0.0%) closed off fractionally at 520.69.
Shares of Lowe's (LOW : Lowe's Companies, Inc
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Last: 31.88-0.79-2.42%

4:49pm 05/21/2007

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LOW31.88, -0.79, -2.4%) lost more than 2% to $31.88, retreating after the company reported that first-quarter profit declined 12% to 48 cents a share and that sales rose 2% to $12.17 billion, with comparable-store sales down 6%.
The company blamed a difficult housing market, tough comparisons due to hurricane rebuilding efforts and significant deflation in lumber and plywood prices. Analysts polled by Thomson Financial had expected earnings of 49 cents a share on revenue of $12.41 billion.
For the second quarter, Lowe's expects overall sales growth of 6% to 7%, a 1%-to-3% same-store sales decrease and earnings between 62 and 64 cents a share. For the full year, the company sees earnings between $1.99 and $2.03 a share on 7% sales growth and a 1%-to-2% decrease in same-store sales. Analysts expect annual earnings of $2.01 a share on revenue of $50.47 billion, on average.
Shares of blue chip Home Depot (HD : Home Depot, Inc
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Last: 38.63-0.25-0.64%

4:48pm 05/21/2007

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HD38.63, -0.25, -0.6%) , the larger archrival of Lowe's, were off 25 cents to $38.63.
Meanwhile, Saks Inc. (SKS : saks inc com
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Last: 21.33-1.36-5.99%

4:48pm 05/21/2007

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SKS21.33, -1.36, -6.0%) saw its shares slip nearly 6% to $21.33.
Charges helped drag down the upscale retailer's first quarter to a fraction of year-ago levels. Saks earned just $11 million, or 7 cents a share, down from $77.9 million, or 57 cents, a year ago. The most recent figures include 12 cents worth of various charges; last year's include 49 cents in one-time gains.
Quarterly revenue came in at $792.7 million, up 15.9%, on a same-store sales boost of 14.4%. The Thomson Financial-derived average estimates had been for Saks to earn 16 cents a share on revenue of $787 million.
Looking to the rest of 2007, the company said it expects same-store sales to grow at a percentage rate in the low double digits for the second quarter and at a rate in the mid-to-high single digits in the fall.
Elsewhere in the retail sector, Wal-Mart Stores (WMT : Wal-Mart Stores, Inc
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Last: 46.62-0.65-1.38%

4:49pm 05/21/2007

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WMT46.62, -0.65, -1.4%) slipped 1.4% to $46.62, while Target (TGT : target corp com
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Last: 58.14-0.01-0.02%

4:48pm 05/21/2007

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TGT58.14, -0.01, 0.0%) lost a penny to $58.14 and Federated Department Stores (FD : Federated Department Stores, Inc
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Last: 39.89+0.19+0.48%

4:35pm 05/21/2007

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FD39.89, +0.19, +0.5%) picked up 19 cents to $39.89.