Lowes Cos. (LOW), the number two home improvement chain, reported results that were simply dreadful. Net income plunged 60.3 percent to $162 million, or 11 cents a share. Revenue plunged 3.8 percent to $9.98 billion. The results missed the consensus estimates for profits of 12 cents a share and sales of $10.1 billion, according to Bloomberg News. Guidance also was below expectations.
Comparable store sales declined 9.9 percent for the fourth quarter and 7.2 percent for fiscal 2008. "The economic pressures on consumers intensified in the fourth quarter, resulting in a further decline in consumer confidence and dramatic reductions in consumer spending," said Chief Executive Robert Niblock in a press release.
The results from J.C. Penney Co. (JCP) were also disastrous. Net income fell to $211 million, or 95 cents a share, versus $430 million, or $1.93 a share, the Plano, Texas-based company said in an earnings release. Net sales dropped 9.8 percent to $5.76 billion. Comparable same-store sales plunged 10.8 percent. The company expected a first quarter loss of 20 to 30 cents. The results beat
Ironically, consumer prices gained in January because retailers tried to raise prices after offering steep discounts during the holiday season to keep sales from declining to only disastrous levels, instead of catastrophic ones. As Bloomberg notes, the increases may not stick since more companies will offer discounts "as the economy sinks into what may be the worst recession in the postwar era."
Going forward, the picture is not pretty. The National Retail Federation expects retail sales to drop 0.5 percent this year compared with last year's modest 1.4 percent gain. Layoffs in the industry are expected to hit unprecedented levels as stores cope with tightening credit and weakening consumer demand.
Home Depot Inc. (HD) and Target Corp. (TGT) are scheduled to report earnings Tuesday. Kohl's Corp. (KSS) earnings are coming Thursday.
Odds are that investors hoping to see signs of a turnaround in these results will be disappointed