Sales for the quarter decreased 1.6 percent to
"We delivered earnings per share within our guidance for the quarter, despite lower than expected sales," commented
During the quarter, Lowe's opened four stores, including one relocation, and closed one store that was damaged by a tornado. As of
A conference call to discuss first quarter 2011 operating results is scheduled for today (
Lowe's Business Outlook
Second Quarter 2011 (comparisons to second quarter 2010)
-- Total sales are expected to increase approximately 4 percent
-- The company expects comparable store sales to increase approximately 2
percent
-- The company expects square footage growth of approximately 1.5 percent
-- Earnings before interest and taxes as a percentage of sales (operating
margin) are expected to increase 20 to 30 basis points
-- Depreciation expense is expected to be approximately $370 million
-- Diluted earnings per share of $0.65 to $0.69 are expected
-- Lowe's second quarter ends on July 29, 2011 with operating results to be
publicly released on Monday, August 15, 2011
Fiscal Year 2011 - a 53-week Year (comparisons to fiscal year 2010 - a 52-week year)
-- Total sales are expected to increase approximately 4 percent, including
the 53rd week
-- The 53rd week is expected to increase total sales by approximately 1.4
percent
-- The company expects comparable store sales to increase 0 to 1 percent
-- The company expects to open approximately 25 stores in 2011 reflecting
total square footage growth of approximately 1.3 percent
-- Earnings before interest and taxes as a percentage of sales (operating
margin) are expected to increase approximately 10 basis points
-- Depreciation expense is expected to be approximately $1.47 billion
-- Diluted earnings per share of $1.56 to $1.64 are expected for the fiscal
year ending February 3, 2012
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"). Statements of the company's expectations for sales growth, comparable store sales, earnings and performance, capital expenditures, store openings, the housing market, the home improvement industry, demand for services, share repurchases and any statement of an assumption underlying any of the foregoing, constitute "forward-looking statements" under the Act. Although the company believes that the expectations, opinions, projections, and comments reflected in its forward-looking statements are reasonable, it 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 expressed or implied by our forward-looking statements including, but not limited to, changes in general economic conditions, such as continued high rates of unemployment, interest rate and currency fluctuations, higher fuel and other energy costs, slower growth in personal income, changes in consumer spending, the availability and increasing regulation 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 the psychological effects of falling home prices and in the level of repairs, remodeling, and additions to existing homes, as well as a general reduction in commercial building activity; (ii) maintain critical information systems; (iii) ensure that customer facing technology systems perform efficiently and reliably; (iv) secure or develop and implement sufficiently robust new technologies to deliver business process solutions in an efficient manner; (v) attract, train, and retain highly-qualified associates who can respond to and embrace changes in our business model; (vi) respond to fluctuations in the prices and availability of services, supplies, and products; (vii) respond to the growth and impact of competition; (viii) differentiate ourselves from competitors based upon our relationships with suppliers of brand name products; (ix) 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; (x) respond to disruption of the domestic or international supply chain caused by transportation disruption, vendor disagreements, vendor failures, host country instability, trade tariffs, or international terrorism; (xi) adequately protect sensitive customer, employee or vendor information; (xii) respond to the unique challenges associated with international expansion, and (xiii) prevent material product liability associated with manufacturing or packaging defects. In addition, we could experience additional impairment losses if 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. 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
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 in the "Risk Factors" included in our Annual Report on Form 10-K to the
With fiscal year 2010 sales of
Lowe's Companies, Inc. Consolidated Statements of Current and Retained Earnings (Unaudited) In Millions, Except Per Share Data Three Months Ended April 29, 2011 April 30, 2010 Current Earnings Amount Percent Amount Percent Net sales$ 12,185 100.00$ 12,388 100.00 Cost of sales 7,866 64.56 8,030 64.82 Gross margin 4,319 35.44 4,358 35.18 Expenses: Selling, general and administrative 3,120 25.60 3,093 24.98 Depreciation 371 3.05 397 3.20 Interest - net 88 0.72 82 0.66 Total expenses 3,579 29.37 3,572 28.84 Pre-tax earnings 740 6.07 786 6.34 Income tax provision 279 2.28 297 2.39 Net earnings$ 461 3.79$ 489 3.95 Weighted average common shares 1,324 1,438 outstanding - basic Basic earnings per common share(1)$ 0.35 $ 0.34 Weighted average common shares 1,328 1,441 outstanding - diluted Diluted earnings per common share(1)$ 0.34 $ 0.34 Cash dividends per share$ 0.11 $ 0.09 Retained Earnings Balance at beginning of period$ 17,371 $ 18,307 Net earnings 461 489 Cash dividends (145) (130) Share repurchases (972) (420) Balance at end of period$ 16,715 $ 18,246
(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
Lowe's Companies, Inc. Consolidated Balance Sheets In Millions, Except Par Value Data (Unaudited) (Unaudited) April 29, 2011 April 30, 2010 January 28, 2011 Assets Current assets: Cash and cash$ 1,496 $ 2,677 $ 652 equivalents Short-term 345 675 471 investments Merchandise 9,661 9,899 8,321 inventory - net Deferred income 232 202 193 taxes - net Other current 239 242 330 assets Total current 11,973 13,695 9,967 assets Property, less 22,060 22,379 22,089 accumulated depreciation Long-term 1,209 832 1,008 investments Other assets 642 508 635 Total assets$ 35,884 $ 37,414 $ 33,699 Liabilities and Shareholders' Equity Current liabilities: Current maturities$ 38 $ 536 $ 36 of long-term debt Accounts payable 6,694 7,062 4,351 Accrued compensation and 557 594 667 employee benefits Deferred revenue 970 901 707 Other current 1,662 1,788 1,358 liabilities Total current 9,921 10,881 7,119 liabilities Long-term debt, excluding 6,538 5,531 6,537 current maturities Deferred income 498 521 467 taxes - net Deferred revenue - 650 576 631 extended protection plan Other liabilities 818 886 833 Total liabilities 18,425 18,395 15,587 Shareholders' equity: Preferred stock -$5 par - - - value, none issued Common stock -$.50 par value; Shares issued and outstanding April 29, 2011 1,318 April 30, 2010 1,443 January 28, 2011 1,354 659 722 677 Capital in excess - 6 11 of par value Retained earnings 16,715 18,246 17,371 Accumulated other 85 45 53 comprehensive income Total shareholders' 17,459 19,019 18,112 equity Total liabilities and shareholders'$ 35,884 $ 37,414 $ 33,699 equity
Lowe's Companies, Inc. Consolidated Statements of Cash Flows (Unaudited) In Millions Three Months Ended April 29, 2011 April 30, 2010 Cash flows from operating activities: Net earnings$ 461 $ 489 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 397 424 Deferred income taxes (43 ) (82 ) Loss on property and other assets - net 9 1 Share-based payment expense 30 26 Net changes in operating assets and liabilities: Merchandise inventory - net (1,329 ) (1,644 ) Other operating assets 106 (35 ) Accounts payable 2,339 2,773 Other operating liabilities 453 784 Net cash provided by operating activities 2,423 2,736 Cash flows from investing activities: Purchases of investments (627 ) (1,171 ) Proceeds from sale/maturity of investments 554 366 Increase in other long-term assets (30 ) (1 ) Property acquired (313 ) (283 ) Proceeds from sale of property and other 5 5 long-term assets Net cash used in investing activities (411 ) (1,084 ) Cash flows from financing activities: Net proceeds from issuance of long-term debt - 992 Repayment of long-term debt (9 ) (25 ) Proceeds from issuance of common stock under 15 20 share-based payment plans Cash dividend payments (149 ) (131 ) Repurchase of common stock (1,031 ) (465 ) Excess tax benefits of share-based payments 3 - Net cash (used in) provided by financing (1,171 ) 391 activities Effect of exchange rate changes on cash 3 2 Net increase in cash and cash equivalents 844 2,045 Cash and cash equivalents, beginning of period 652 632 Cash and cash equivalents, end of period$ 1,496 $ 2,677
Source: Lowe's Companies, Inc.