World's second largest DIY retailer sees 19.1% drop in net earnings, as "cautious consumers" remain reluctant to take on home improvement projects.
Lowe's Companies Inc posted a 19.1% drop in net earnings of $759m for the quarter ended July 31, 2009, compared with the same period a year ago. Net earnings for the US home improvement chain were down 20.1% for the first half.

Sales for the quarter dropped 4.6% to $13.8bn, compared with Q2 in 2008, while like-for-like sales were down 9.5%.

Lowe's chairman Robert A. Niblock blamed 'wavering customer confidence' for the drop in spending, as US homeowners postpone renovations and DIY projects until the economy appears more stable.

He explained: "Cautious consumers remain reluctant to take on discretionary projects until signs of economic improvement are more evident."

However, he felt the DIY chain had still posted "reasonable earnings for the quarter" and gained market share to maintain its competitive position.

During the quarter ended July 31, Lowe's opened 18 new stores and expects to open around 11 further stores - reflecting a square footage growth of around 5%. Despite this, Lowe's is re-evaluating its future store expansion plans as a result of a decline in demand within the sector.

Lowe's Q2 statement explained: "The company has evaluated the pipeline of potential future store sites and made the decision to no longer pursue several projects."

The company's results reflected a pre-tax charge of $48m for Q2 primarily related to these projects.