-- First Quarter Comparable Store Sales Increased 2.4 Percent--
Sales for the quarter increased 4.7 percent to
"Consumers are showing signs of reengagement in home improvement, including discretionary projects and purchases of bigger ticket products, which had taken a back seat during the worst of the economic downturn," commented
"While we are optimistic we will experience solid demand through the balance of the year, we view 2010 as a year of transition for our industry. We remain confident that our commitment to providing excellent customer service, combined with great merchandising, will drive profitable sales and market share growth."
During the quarter,
A conference call to discuss first quarter 2010 operating results is scheduled for today (
Lowe's Business Outlook
Second Quarter 2010 (comparisons to second quarter 2009)
-- The company expects to open approximately 4 new stores reflecting square footage growth of approximately 2 percent -- Total sales are expected to increase 5 to 7 percent -- The company expects comparable store sales to increase 2 to 4 percent -- Earnings before interest and taxes as a percentage of sales (operating margin) is expected to increase approximately 40 basis points -- Depreciation expense is expected to be approximately$400 million -- Diluted earnings per share of$0.57 to $0.59 are expected --Lowe's second quarter ends onJuly 30, 2010 with operating results to be publicly released onMonday, August 16, 2010
Fiscal Year 2010 (comparisons to fiscal year 2009)
-- The company expects to open 40 to 45 stores in 2010 reflecting total square footage growth of approximately 2 percent -- Total sales are expected to increase 5 to 7 percent -- The company expects comparable store sales to increase 2 to 4 percent -- Earnings before interest and taxes as a percentage of sales (operating margin) is expected to increase approximately 60 basis points -- Depreciation expense is expected to be approximately$1.60 billion -- Diluted earnings per share of$1.37 to $1.47 are expected for the fiscal year endingJanuary 28, 2011
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, beliefs and other similar expressions 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, changes in the rate of housing turnover, 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) secure, develop, and otherwise implement new technologies and processes designed to enhance our efficiency and competitiveness; (iii) attract, train, and retain highly-qualified associates; (iv) locate, secure, and successfully develop new sites for store development particularly in major metropolitan markets; (v) respond to fluctuations in the prices and availability of services, supplies, and products; (vi) respond to the growth and impact of competition; (vii) address changes in existing or new laws or regulations that affect employment/labor, trade, product safety, transportation/logistics, energy costs, health care, tax or environmental issues; and (viii) respond to unanticipated weather conditions that could adversely affect sales. 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 the "Risk Factors" and other information included in our periodic reports filed with the
With fiscal year 2009 sales of
Lowe's Companies , Inc. Consolidated Statements of Current and Retained Earnings (Unaudited) In Millions, Except Per Share Data Three Months Ended April 30, 2010 May 1, 2009 Current Earnings Amount Percent Amount Percent Net sales $ 12,388 100.00 $ 11,832 100.00 Cost of sales 8,030 64.82 7,636 64.54 Gross margin 4,358 35.18 4,196 35.46 Expenses: Selling, general and 3,093 24.98 2,957 24.99 administrative Depreciation 397 3.20 401 3.39 Interest - net 82 0.66 78 0.66 Total expenses 3,572 28.84 3,436 29.04 Pre-tax earnings 786 6.34 760 6.42 Income tax provision 297 2.39 284 2.40 Net earnings $ 489 3.95 $ 476 4.02 Weighted average common shares 1,438 1,462 outstanding - basic Basic earnings per common share $ 0.34 $ 0.32 Weighted average common shares 1,441 1,464 outstanding - diluted Diluted earnings per common share $ 0.34 $ 0.32 Cash dividends per share $ 0.090 $ 0.085 Retained Earnings Balance at beginning of period $ 18,307 $ 17,049 Net earnings 489 476 Cash dividends (130 ) (126 ) Share repurchases (420 ) - Balance at end of period $ 18,246 $ 17,399
Lowe's Companies, Inc. Consolidated Balance Sheets In Millions, Except Par Value Data (Unaudited) (Unaudited) April 30, 2010 May 1, 2009 January 29, 2010 Assets Current assets: Cash and cash $ 2,677 $ 682 $ 632 equivalents Short-term 675 460 425 investments Merchandise 9,899 9,013 8,249 inventory - net Deferred income 202 122 208 taxes - net Other current 242 264 218 assets Total current 13,695 10,541 9,732 assets Property, less accumulated 22,379 22,715 22,499 depreciation Long-term 832 448 277 investments Other assets 508 444 497 Total assets $ 37,414 $ 34,148 $ 33,005 Liabilities and Shareholders' Equity Current liabilities: Current maturities $ 536 $ 52 $ 552 of long-term debt Accounts payable 7,062 5,843 4,287 Accrued compensation and 594 535 577 employee benefits Deferred revenue 901 741 683 Other current 1,788 1,564 1,256 liabilities Total current 10,881 8,735 7,355 liabilities Long-term debt, excluding current 5,531 5,023 4,528 maturities Deferred income 521 533 598 taxes - net Other liabilities 1,462 1,420 1,455 Total liabilities 18,395 15,711 13,936 Shareholders' equity: Preferred stock - $5 par value, none - - - issued Common stock - $.50 par value; Shares issued and outstanding April 30, 2010 1,443 May 1, 2009 1,474 January 29, 2010 1,459 722 737 729 Capital in excess 6 296 6 of par value Retained earnings 18,246 17,399 18,307 Accumulated other comprehensive 45 5 27 income Total shareholders' 19,019 18,437 19,069 equity Total liabilities and shareholders' $ 37,414 $ 34,148 $ 33,005 equity
Lowe's Companies , Inc. Consolidated Statements of Cash Flows (Unaudited) In Millions Three Months Ended April 30, 2010 May 1, 2009 Cash flows from operating activities: Net earnings $ 489 $ 476 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 424 434 Deferred income taxes (82 ) (83 ) Loss on property and other assets - net 1 9 Share-based payment expense 26 24 Net changes in operating assets and liabilities: Merchandise inventory - net (1,644 ) (801 ) Other operating assets (35 ) (1 ) Accounts payable 2,773 1,732 Other operating liabilities 784 555 Net cash provided by operating activities 2,736 2,345 Cash flows from investing activities: Purchases of short-term investments (426 ) (68 ) Proceeds from sale/maturity of short-term 228 122 investments Purchases of long-term investments (745 ) (302 ) Proceeds from sale/maturity of long-term 138 6 investments (Increase) decrease in other long-term (1 ) 15 assets Property acquired (283 ) (572 ) Proceeds from sale of property and other 5 11 long-term assets Net cash used in investing activities (1,084 ) (788 ) Cash flows from financing activities: Net decrease in short-term borrowings - (986 ) Proceeds from issuance of long-term debt 992 - Repayment of long-term debt (25 ) (8 ) Proceeds from issuance of common stock from stock 20 1 options exercised Cash dividend payments (131 ) (126 ) Repurchase of common stock (465 ) - Net cash provided by (used in) financing 391 (1,119 ) activities Effect of exchange rate changes on cash 2 (1 ) Net increase in cash and cash equivalents 2,045 437 Cash and cash equivalents, beginning of 632 245 period Cash and cash equivalents, end of period $ 2,677 $ 682
Source:Lowe's Companies , Inc.