MOORESVILLE, N.C.–Rising operating expenses and charges related to store closings and discontinued projects hammered Lowe’s bottom line in the third quarter, reducing net income by 44 percent to $225 million.
Selling, general and administrative expenses jumped 10.3 percent in dollars and 197 basis points as a percentage of sales in the quarter, which ended on Oct. 28. Gross margin was down 99 basis points to 34.1 percent, and the above-mentioned charges reduced pretax income by $336 million.
Net sales increased 2.3 percent in the quarter, totaling $11.9 billion, including a same-store sales increase of 0.7 percent. “Our performance is not at the level we expect relative to the market,” said Robert Niblock, Lowe’s chairman, president and CEO. “We are making the changes necessary to right-size the organization, improve speed to market and enhance the shopping experience.”