Still, Niblock said he expected effects of recent Federal Reserve rate cuts and the U.S. stimulus package to eventually promote business growth and improve housing affordability.
Lowe's, based in Mooresville, North Carolina, forecast profit of 38 cents to 42 cents a share for the current first quarter and $1.50 to $1.58 for the full year. Analysts expect 44 cents for the first quarter and $1.74 for the year, according to Reuters Estimates.
During a conference call, Lowe's finance chief Robert Hull said performance had improved in February after an 11 percent decline in January.
Lowe's said it will open 120 stores in 2008, scaling back planned stores in hard-hit markets such as California. In September, Lowe's had said it would open 135 to 145 stores in North America annually from 2008 through 2010. During its 2007 fiscal year, Lowe's opened 153 stores, including about four relocations.
The retailer said it would also hold costs down by staffing more conservatively in the spring than it has in the past and pulling back on major projects to remerchandise existing stores, although routine maintenance will continue.
The "outlook looks realistic-to-somewhat conservative, somewhat surprising given the company's persistent optimism through the housing/home improvement correction thus far," Sanford Bernstein analyst Colin McGranahan said in a research note.
Lowe's shares were up $1.13 cents, or 4.8 percent, to $24.72 in midday New York Stock Exchange trading, while Home Depot was up 55 cents at $28.32, or 2 percent. Lowe's stock has fallen about 30 percent in the past year, while Home Depot is down 31 percent.