The company also projected results below analysts' expectations, sending shares lower in premarket trading to $22.51 from Friday's close at $23.59.
Lowe's reported net income of $408 million, or 28 cents a share, for the quarter ended Feb. 1, compared to $613 million, or 40 cents a share, a year earlier. Net sales decreased 0.3% to $10.38 billion from $10.41 billion as same-store sales declined 7.6%.
Lowe's in November projected earnings of 25 cents to 29 cents a share on a 3% revenue increase, below analysts' then-expectations, with same-store sales declining 3% to 5%. The latest mean estimates of analysts surveyed by Thomson Financial were for earnings of 25 cents a share on revenue of $10.62 billion. Gross margin fell to 34.9% from 35.4%.
On top of the housing market downturn, the fourth quarter is seasonally the weakest for home-improvement retailers as the colder weather typically results in fewer building and renovation projects.
Chairman and Chief Executive Robert A. Niblock said sales were below expectations "as we faced an unprecedented decline in housing turnover, falling home prices in many areas and turbulent mortgage markets that impacted both sentiment related to home improvement purchases as well as consumers' access to capital."
He went on to say "the next several quarters will be challenging on many fronts as industry sales are likely to remain soft."