Target, Lowe’s revise sales outlook downward

updated 8:55 p.m. ET Sept. 24, 2007

NEW YORK - Two of the nation's leading retailers — discounter Target Corp. and home improvement merchant Lowe's Cos. — both tempered their sales forecasts on Monday, creating more uncertainty about the upcoming holiday shopping season.

Target Corp. on Monday cut its forecast for September same-store sales growth. Same-store sales, or sales at stores open at least a year, is an important indicator of retailer performance, as it measures sales at existing stores rather than newly opened ones

In a recorded message, Target reduced its growth projection to a range of 1.5 percent to 2.5 percent, versus a previous forecast of 4 percent to 6 percent.

Target cited weaker store traffic in September, particularly in Florida and the Northeast.

Meanwhile, Lowe's said it now projects fiscal-year earnings at the low end or slightly below its prior forecast, citing lower-than-expected sales trends.

Lowe's said drought conditions in the mid-Atlantic, Southeastern and Western regions of the country have hurt performance in its outdoor segment.

The company had predicted earnings between $1.97 and $2.01 per share. Analysts polled by Thomson Financial predict a profit of $1.99 per share.

For 2008 to 2010, the company expects earnings to increase 12 percent to 15 percent per year and sales to climb 8 percent to 11 percent per year.

"Even as we face easier prior year sales comparisons as we progress through the year, many uncertainties remain, and it seems prudent to further temper our sales and earnings outlook," Robert A. Niblock, Lowe's chairman and CEO, said in a statement.

Shares of Mooresville, North Carolina-based Lowe's fell $1.91, or 6.3 percent, to $28.64 in aftermarket electronic trading. They closed the regular session down 7 cents at $30.55.

Shares of Target fell $2.56, or 4 percent, to $61.74 in aftermarket activity. Earlier, shares fell $1.35, or 2.1 percent, to end regular trading at $64.30.

Both retailers made their announcements after regular markets closed.

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