Atlanta, Oct. 12 (Bloomberg) -- Home Depot Inc. shares fell 19 percent after the No. 1 U.S. home-improvement chain said fiscal third-quarter profit will miss forecasts because lower prices for lumber and other building materials hurt sales.

Profit in the quarter ending Oct. 29 will be about 28 cents a share, spokesman Jerry Shields said. Analysts' average estimate was 31 cents, according to First Call/Thomson Financial. Sales at stores open at least a year will rise about 4 percent, less than Home Depot's previous forecast for a gain of as much as 7 percent.

``This tells you how bad the retail industry is right now and how consumers are pulling in their wallets,'' said Guy Truicko, a money manager at Garden City, New York-based Unity Management Inc., which owns Home Depot shares. ``It's not just a Home Depot problem, it's the continued slowdown in retail spending by consumers.''

Rising interest rates and gasoline prices have caused U.S. consumers to cut spending. Home Depot and other home-improvement chains also have struggled with lower lumber prices, which have fallen 35 percent this year, according to the price of futures contracts traded on the Chicago Mercantile Exchange, as production of the building material outpaced construction.

Home Depot shares fell 9.19 to 39.75 in Instinet trading. They had fallen 29 percent this year. The Atlanta-based company has met or exceeded analysts' average estimates for quarterly earnings in 19 of the last 22 quarters, First Call said.

The company plans to release results Nov. 14.

Home Depot said it expects to earn $1.16 to $1.17 a share for the fiscal year ending in January, less than First Call's average estimate of $1.25.

Lowe's Cos., the No. 2 U.S. home-improvement chain, said last week that its same-store sales would miss forecasts for its third quarter ending Oct. 27 because of lower lumber prices and the integration of the Eagle Hardware & Garden Inc. chain.

(Home Depot has a teleconference scheduled for 9 a.m. New York time. Call (719) 457-2626, and the passcode is 773571. A Webcast is available at www.homedepot.com and will be available for replay at www.homedepot.com under Financial Information for three days.)