Lowe's shares slump on disappointing outlook

Lowe’s shares slumped sharply Wednesday after the home improvement retailer’s quarterly profit and earnings outlook disappointed investors.

Even though Lowe’s same-store sales surged 30%, investors focused instead on the much slower 15-20% rise the retailer forecast for the holiday quarter. They were also disappointed by the 34% plunge in net earnings, which was a bit deeper than Wall Street expected. What’s more, Lowe’s projected earnings for the current quarter also largely fell short of analysts’ estimates.

The company has been spending money, upgrading supply chains to stock shelves faster and building its online shopping features where it lags Home Depot. It has also had to spend significantly more on employee pay, doling out bonuses to those working through the health crisis.

Lowe’s shares, which have risen 33% this year, were the top decliner on the S&P 500 Wednesday morning.