MOORESVILLE, N.C., Aug. 19, 2015 /PRNewswire/ -- Lowe's
Companies, Inc. (NYSE: LOW) today reported net earnings of
$1.13 billion for the quarter ended
July 31, 2015, an 8.4 percent
increase over the same period a year ago. Diluted earnings per
share increased 15.4 percent to $1.20
from $1.04 in the second quarter of
2014. For the six months ended July 31,
2015, net earnings increased 8.2 percent from the same
period a year ago to $1.80 billion,
and diluted earnings per share increased 15.9 percent to
$1.90.
Sales for the second quarter increased 4.5 percent to
$17.3 billion from $16.6 billion in the second quarter of 2014, and
comparable sales increased 4.3 percent. For the six month period,
sales were $31.5 billion, a 4.9
percent increase over the same period a year ago, and comparable
sales increased 4.7 percent. Comparable sales for the U.S. home
improvement business increased 4.6 percent for the second quarter
and 4.9 percent for the six month period.
"We posted solid results for the quarter and were able to
capitalize on big-ticket market share opportunities with strong
growth in categories like appliances and outdoor power equipment,"
commented Robert A. Niblock, Lowe's
chairman, president and CEO. "I would like to thank our employees
for their hard work and commitment to serving customers during this
important selling season."
"Our year-to-date earnings per share performance was in line
with our expectations. This, together with the execution of
our strategic priorities, gives us confidence in our Business
Outlook for 2015," Niblock added.
Delivering on its commitment to return excess cash to
shareholders, the company repurchased $1.5
billion of stock under its share repurchase program and paid
$218 million in dividends in the
second quarter. For the six month period, the company repurchased
$2.5 billion of stock under its share
repurchase program and paid $440
million in dividends.
As of July 31, 2015, Lowe's
operated 1,846 home improvement and hardware stores in the United States, Canada and Mexico representing 201.4 million square feet
of retail selling space.
A conference call to discuss second quarter 2015 operating
results is scheduled for today (Wednesday,
August 19) at 9:00 am
ET. The conference call will be available by webcast
and can be accessed by visiting Lowe's website at
www.Lowes.com/investor and clicking on Lowe's Second Quarter 2015
Earnings Conference Call Webcast. Supplemental slides will be
available fifteen minutes prior to the start of the conference
call. A replay of the call will be archived on Lowes.com/investor
until November 17, 2015.
Lowe's Business Outlook
Fiscal Year 2015 (comparisons to fiscal year 2014; based
on U.S. GAAP unless otherwise noted)
- Total sales are expected to increase 4.5 to 5 percent.
- Comparable sales are expected to increase 4 to 4.5
percent.
- The company expects to add 15 to 20 home improvement and
hardware stores.
- Earnings before interest and taxes as a percentage of sales
(operating margin) are expected to increase 80 to 100 basis
points.
- The effective income tax rate is expected to be approximately
38.1%.
- Diluted earnings per share of approximately $3.29 are expected for the fiscal year ending
January 29, 2016.
Disclosure Regarding Forward-Looking Statements
This news release includes "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995
(the "Act"), which the words "believe", "expect", "project",
"will", "should", "could", and similar expressions are intended to
imply. Statements of the company's expectations for sales growth,
comparable sales, earnings and performance, shareholder value,
capital expenditures, cash flows, the housing market, the home
improvement industry, demand for services, share repurchases, the
Company's strategic initiatives and any statement of an assumption
underlying any of the foregoing, constitute "forward-looking
statements" under the Act. Although we believe that the
expectations, opinions, projections, and comments reflected in
these forward-looking statements are reasonable, we can give no
assurance that such statements will prove to be correct. A wide
variety of potential risks, uncertainties, and other factors could
materially affect our ability to achieve the results either
expressed or implied by our forward-looking statements including,
but not limited to, changes in general economic conditions, such as
the rate of unemployment, interest rate and currency
fluctuations, fuel and other energy costs, slower growth in
personal income, changes in consumer spending, changes in the rate
of housing turnover, the availability of consumer credit and of
mortgage financing, inflation or deflation of commodity prices, and
other factors which can negatively affect our customers, as well as
our ability to: (i) respond to adverse trends in the housing
industry, such as a demographic shift from single family to
multi-family housing, a reduced rate of growth in household
formation, and slower rates of growth in housing renovation
and repair activity, as well as uneven recovery in commercial
building activity; (ii) secure, develop, and otherwise implement
new technologies and processes necessary to realize the benefits of
our strategic initiatives and enhance our efficiency; (iii)
attract, train, and retain highly-qualified associates; (iv) manage
our business effectively as we adapt our traditional operating
model to meet the changing expectations of our customers; (v)
maintain, improve, upgrade and protect our critical information
systems from data security breaches and other cyber threats; (vi)
respond to fluctuations in the prices and availability of services,
supplies, and products; (vii) respond to the growth and impact of
competition; (viii) address changes in existing or new laws or
regulations that affect consumer credit, employment/labor, trade,
product safety, transportation/logistics, energy costs, health
care, tax or environmental issues; and (ix) respond appropriately
to unanticipated failures to maintain a high level of product and
service quality that could result in a negative impact on customer
confidence and adversely affect sales. In addition, we could
experience additional impairment losses if either the actual
results of our operating stores are not consistent with the
assumptions and judgments we have made in estimating future cash
flows and determining asset fair values, or we are required to
reduce the carrying amount of our investment in certain
unconsolidated entities that are accounted for under the equity
method. For more information about these and other risks and
uncertainties that we are exposed to, you should read the "Risk
Factors" and "Critical Accounting Policies and Estimates" included
in our Annual Report on Form 10-K to the United States Securities
and Exchange Commission (the "SEC") and the description of material
changes therein or updated version thereof, if any, included in our
Quarterly Reports on Form 10-Q.
The forward-looking statements contained in this news release
are based upon data available as of the date of this release or
other specified date and speak only as of such date. All
subsequent written and oral forward-looking statements attributable
to us or any person acting on our behalf about any of the matters
covered in this release are qualified by these cautionary
statements and the "Risk Factors" included in our Annual Report on
Form 10-K to the SEC and the description of material changes, if
any, therein included in our Quarterly Reports on Form 10-Q.
We expressly disclaim any obligation to update or revise any
forward-looking statement, whether as a result of new information,
change in circumstances, future events, or otherwise.
Lowe's Companies, Inc. (NYSE: LOW) is a FORTUNEĀ® 50 home
improvement company serving approximately 16 million customers a
week in the United States,
Canada and Mexico through its stores and online at
Lowes.com, Lowes.ca and Lowes.com.mx. With fiscal year 2014
sales of $56.2 billion, Lowe's has
more than 1,845 home improvement and hardware stores and 265,000
employees. Founded in 1946 and based in Mooresville, N.C., Lowe's supports the
communities it serves through programs that focus on K-12 public
education and community improvement projects. For more information,
visit Lowes.com.
Lowe's Companies,
Inc.
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Consolidated
Statements of Current and Retained Earnings
(Unaudited)
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In Millions, Except
Per Share and Percentage Data
|
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Three months
ended
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Six months
ended
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|
July 31,
2015
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August 1,
2014
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July 31,
2015
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August 1,
2014
|
Current
Earnings
|
|
|
|
Amount
|
%
Sales
|
|
|
Amount
|
%
Sales
|
|
|
Amount
|
%
Sales
|
|
|
Amount
|
%
Sales
|
Net
sales
|
|
|
$
|
17,348
|
100.00
|
|
$
|
16,599
|
100.00
|
|
$
|
31,478
|
100.00
|
|
$
|
30,001
|
100.00
|
|
|
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|
|
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Cost of
sales
|
|
|
|
11,367
|
65.53
|
|
|
10,864
|
65.45
|
|
|
20,486
|
65.08
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|
|
19,508
|
65.02
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|
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Gross
margin
|
|
|
|
5,981
|
34.47
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|
|
5,735
|
34.55
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|
|
10,992
|
34.92
|
|
|
10,493
|
34.98
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Expenses:
|
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Selling, general and
administrative
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3,634
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20.94
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|
3,541
|
21.33
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|
|
7,047
|
22.39
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|
|
6,859
|
22.87
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|
|
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|
|
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|
Depreciation
|
|
|
|
375
|
2.16
|
|
|
375
|
2.26
|
|
|
741
|
2.35
|
|
|
748
|
2.49
|
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|
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|
|
|
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|
|
Interest -
net
|
|
|
|
133
|
0.77
|
|
|
126
|
0.76
|
|
|
267
|
0.85
|
|
|
250
|
0.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
expenses
|
|
|
|
4,142
|
23.87
|
|
|
4,042
|
24.35
|
|
|
8,055
|
25.59
|
|
|
7,857
|
26.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
earnings
|
|
|
|
1,839
|
10.60
|
|
|
1,693
|
10.20
|
|
|
2,937
|
9.33
|
|
|
2,636
|
8.79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision
|
|
|
|
713
|
4.11
|
|
|
654
|
3.94
|
|
|
1,138
|
3.62
|
|
|
973
|
3.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
|
$
|
1,126
|
6.49
|
|
$
|
1,039
|
6.26
|
|
$
|
1,799
|
5.71
|
|
$
|
1,663
|
5.54
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Weighted average
common shares outstanding - basic
|
|
|
|
931
|
|
|
|
995
|
|
|
|
940
|
|
|
|
1,005
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
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|
|
Basic earnings per
common share (1)
|
|
|
$
|
1.20
|
|
|
$
|
1.04
|
|
|
$
|
1.90
|
|
|
$
|
1.65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - diluted
|
|
|
|
933
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|
|
|
996
|
|
|
|
942
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|
|
|
1,007
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|
|
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|
Diluted earnings
per common share (1)
|
|
|
$
|
1.20
|
|
|
$
|
1.04
|
|
|
$
|
1.90
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|
|
$
|
1.64
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|
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|
Cash dividends per
share
|
|
|
$
|
0.28
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|
$
|
0.23
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$
|
0.51
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|
|
$
|
0.41
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|
|
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|
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|
|
|
|
|
|
Retained
Earnings
|
|
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|
|
|
|
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|
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|
|
Balance at beginning
of period
|
|
|
$
|
9,085
|
|
|
$
|
10,985
|
|
|
$
|
9,591
|
|
|
$
|
11,355
|
|
Net
earnings
|
|
|
|
1,126
|
|
|
|
1,039
|
|
|
|
1,799
|
|
|
|
1,663
|
|
Cash
dividends
|
|
|
|
(260)
|
|
|
|
(229)
|
|
|
|
(478)
|
|
|
|
(411)
|
|
Share
repurchases
|
|
|
|
(1,418)
|
|
|
|
(1,046)
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|
|
|
(2,379)
|
|
|
|
(1,858)
|
|
Balance at end of
period
|
|
|
$
|
8,533
|
|
|
$
|
10,749
|
|
|
$
|
8,533
|
|
|
$
|
10,749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
|
|
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|
|
|
|
|
|
(1) Under the
two-class method, earnings per share is calculated using net
earnings allocable to common shares, which is derived by reducing
net earnings by the earnings allocable to participating
securities. Net earnings allocable to common shares used in
the basic and diluted earnings per share calculation were $1,121
million for the three months ended July 31, 2015 and $1,033 million
for the three months ended August 1, 2014. Net earnings
allocable to common shares used in the basic and diluted earnings
per share calculation were $1,790 million for the six months ended
July 31, 2015 and $1,654 million for the six months ended August 1,
2014.
|
|
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|
|
|
|
|
|
|
|
|
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|
|
|
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|
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|
|
|
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|
|
Lowe's Companies,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Statements of Comprehensive Income (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In Millions, Except
Percentage Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
Six months
ended
|
|
|
|
|
July 31,
2015
|
|
|
August 1,
2014
|
|
|
July 31,
2015
|
|
|
August 1,
2014
|
|
|
|
|
Amount
|
%
Sales
|
|
|
Amount
|
%
Sales
|
|
|
Amount
|
%
Sales
|
|
|
Amount
|
%
Sales
|
Net
earnings
|
|
|
$
|
1,126
|
6.49
|
|
$
|
1,039
|
6.26
|
|
$
|
1,799
|
5.71
|
|
$
|
1,663
|
5.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments - net of tax
|
|
|
|
(229)
|
(1.32)
|
|
|
4
|
0.02
|
|
|
(207)
|
(0.66)
|
|
|
12
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income/(loss)
|
|
|
|
(229)
|
(1.32)
|
|
|
4
|
0.02
|
|
|
(207)
|
(0.66)
|
|
|
12
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
|
|
$
|
897
|
5.17
|
|
$
|
1,043
|
6.28
|
|
$
|
1,592
|
5.05
|
|
$
|
1,675
|
5.58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lowe's Companies,
Inc.
|
|
|
|
|
|
|
|
|
|
Consolidated
Balance Sheets
|
|
|
|
|
|
|
|
|
|
In Millions, Except
Par Value Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
July 31,
2015
|
|
|
August 1,
2014
|
|
|
January 30,
2015
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
901
|
|
$
|
1,039
|
|
$
|
466
|
Short-term
investments
|
|
|
188
|
|
|
90
|
|
|
125
|
Merchandise inventory -
net
|
|
|
9,704
|
|
|
9,315
|
|
|
8,911
|
Deferred income taxes -
net
|
|
|
251
|
|
|
276
|
|
|
230
|
Other current
assets
|
|
|
322
|
|
|
355
|
|
|
348
|
|
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
11,366
|
|
|
11,075
|
|
|
10,080
|
|
|
|
|
|
|
|
|
|
|
Property, less accumulated
depreciation
|
|
|
19,751
|
|
|
20,368
|
|
|
20,034
|
Long-term
investments
|
|
|
412
|
|
|
382
|
|
|
354
|
Other assets
|
|
|
1,216
|
|
|
1,312
|
|
|
1,359
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
32,745
|
|
$
|
33,137
|
|
$
|
31,827
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
Current maturities of
long-term debt
|
|
$
|
1,014
|
|
$
|
54
|
|
$
|
552
|
Accounts payable
|
|
|
7,123
|
|
|
6,191
|
|
|
5,124
|
Accrued compensation and
employee benefits
|
|
667
|
|
|
635
|
|
|
773
|
Deferred revenue
|
|
|
1,146
|
|
|
1,039
|
|
|
979
|
Other current
liabilities
|
|
|
2,191
|
|
|
2,094
|
|
|
1,920
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
12,141
|
|
|
10,013
|
|
|
9,348
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, excluding
current maturities
|
|
10,345
|
|
|
10,063
|
|
|
10,815
|
Deferred income taxes -
net
|
|
|
-
|
|
|
187
|
|
|
97
|
Deferred revenue - extended
protection plans
|
|
739
|
|
|
743
|
|
|
730
|
Other
liabilities
|
|
|
833
|
|
|
891
|
|
|
869
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
24,058
|
|
|
21,897
|
|
|
21,859
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
|
|
Preferred stock - $5 par
value, none issued
|
|
|
-
|
|
|
-
|
|
|
-
|
Common stock - $.50 par
value;
|
|
|
|
|
|
|
|
|
|
Shares issued and
outstanding
|
|
|
|
|
|
|
|
|
|
July 31,
2015
|
928
|
|
|
|
|
|
|
|
|
August 1,
2014
|
991
|
|
|
|
|
|
|
|
|
January 30,
2015
|
960
|
|
464
|
|
|
496
|
|
|
480
|
Capital in excess of par
value
|
|
|
-
|
|
|
-
|
|
|
-
|
Retained earnings
|
|
|
8,533
|
|
|
10,749
|
|
|
9,591
|
Accumulated other
comprehensive loss
|
|
|
(310)
|
|
|
(5)
|
|
|
(103)
|
|
|
|
|
|
|
|
|
|
|
Total shareholders'
equity
|
|
|
8,687
|
|
|
11,240
|
|
|
9,968
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
32,745
|
|
$
|
33,137
|
|
$
|
31,827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lowe's Companies,
Inc.
|
|
|
|
|
Consolidated
Statements of Cash Flows (Unaudited)
|
|
|
|
|
In
Millions
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
July 31,
2015
|
|
August 1,
2014
|
Cash flows from
operating activities:
|
|
|
|
|
Net
earnings
|
|
$
1,799
|
|
$
1,663
|
Adjustments to
reconcile net earnings to net cash provided by
|
|
|
|
|
operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
791
|
|
798
|
Deferred income
taxes
|
|
(102)
|
|
(137)
|
Loss on property and
other assets - net
|
|
17
|
|
29
|
Loss on equity method
investments
|
|
31
|
|
31
|
Share-based payment
expense
|
|
57
|
|
53
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Merchandise inventory
- net
|
|
(804)
|
|
(182)
|
Other operating
assets
|
|
27
|
|
90
|
Accounts
payable
|
|
2,005
|
|
1,180
|
Other operating
liabilities
|
|
343
|
|
398
|
Net cash provided
by operating activities
|
|
4,164
|
|
3,923
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Purchases of
investments
|
|
(488)
|
|
(300)
|
Proceeds from
sale/maturity of investments
|
|
366
|
|
293
|
Capital
expenditures
|
|
(570)
|
|
(384)
|
Contributions to
equity method investments - net
|
|
(39)
|
|
(151)
|
Proceeds from sale of
property and other long-term assets
|
|
20
|
|
24
|
Other -
net
|
|
(25)
|
|
(7)
|
Net cash used in
investing activities
|
|
(736)
|
|
(525)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Net decrease in
short-term borrowings
|
|
-
|
|
(386)
|
Repayment of
long-term debt
|
|
(31)
|
|
(25)
|
Proceeds from
issuance of common stock under
share-based payment plans
|
|
62
|
|
68
|
Cash dividend
payments
|
|
(440)
|
|
(369)
|
Repurchase of common
stock
|
|
(2,629)
|
|
(2,051)
|
Other -
net
|
|
50
|
|
12
|
Net cash used in
financing activities
|
|
(2,988)
|
|
(2,751)
|
|
|
|
|
|
Effect of exchange
rate changes on cash
|
|
(5)
|
|
1
|
|
|
|
|
|
Net increase in cash
and cash equivalents
|
|
435
|
|
648
|
Cash and cash
equivalents, beginning of period
|
|
466
|
|
391
|
Cash and cash
equivalents, end of period
|
|
$
901
|
|
$
1,039
|
|
|
|
|
|
|
|
|
|
|
Logo -
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visit:http://www.prnewswire.com/news-releases/lowes-reports-second-quarter-sales-and-earnings-results-300130227.html
SOURCE Lowe's Companies, Inc.