Lehman said it cut its 2001 earnings estimate to $1.38 from $1.40 a share for America's No. 1 home-improvement retailer. Lehman also lowered its forecast for the fourth quarter by a penny, to 24 cents from 25 cents.

Home Depot launched a chain-wide 10%-off sale from Dec. 21 to Dec. 24 in an effort to boost weak sales.