by Calculated Risk on 2/20/2009 09:07:00 AM
Friday, February 20, 2009
Lowe's: Same Store Sales to Decline 6% to 10%
From the WSJ: Lowe's Profit Drops Sharply, Evaluates Expenses
Lowe's Cos.' fiscal fourth-quarter net income dropped 60% on falling sales and margins as the world's second-largest home-improvement retailer projected earnings below analysts' expectations.According to the BEA data, home improvement has held up better than other areas of residential investment:
...
Lowe's expects first-quarter ... same-store sales falling 6% to 10%.
Chief Executive Robert Niblock said Friday economic pressures continued to sap consumer confidence and spending, resulting in weak same-store sales.
Click on graph for updated image in new window.
This graph shows home improvement investment as a percent of GDP.
Home improvement was at 1.20% of GDP in Q4 2008, off the high of 1.30% in Q4 2005 - but still well above the average of the last 50 years of 1.07%.
This would seem to suggest there remains significant downside risk to home improvement spending over the next couple of years (although some analysts disagree with the BEA numbers).