Second Quarter Diluted Earnings Per Share Increased 13.7 Percent
Second Quarter Comparable Store Sales Increased 1.6 Percent
Sales for the quarter increased 3.7 percent to
"Despite economic uncertainty, our continued focus on the customer and prudent expense management yielded solid results for the quarter," said
During the quarter,
A conference call to discuss second quarter 2010 operating results is scheduled for today (
Lowe's Business Outlook
Third Quarter 2010 (comparisons to third quarter 2009)
-- The company expects to open approximately 12 new stores reflecting square footage growth of approximately 2 percent -- Total sales are expected to increase 3 to 5 percent -- The company expects comparable store sales to increase 1 to 3 percent -- Earnings before interest and taxes as a percentage of sales (operating margin) is expected to increase approximately 120 basis points -- Depreciation expense is expected to be approximately$400 million -- Diluted earnings per share of$0.28 to $0.32 are expected --Lowe's third quarter ends onOctober 29, 2010 with operating results to be publicly released onMonday, November 15, 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 approximately 4 percent -- The company expects comparable store sales to increase approximately 2 percent -- Earnings before interest and taxes as a percentage of sales (operating margin) is expected to increase approximately 70 basis points -- Depreciation expense is expected to be approximately$1.60 billion -- Diluted earnings per share of$1.38 to $1.45 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, 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, 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 consumer credit, 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 in the "Risk Factors" included in our Annual Report on Form 10-K to 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 Six Months Ended July 30, 2010 July 31, 2009 July 30, 2010 July 31, 2009 Current Amount Percent Amount Percent Amount Percent Amount Percent Earnings Net sales $ 14,361 100.00 $ 13,844 100.00 $ 26,749 100.00 $ 25,676 100.00 Cost of sales 9,355 65.14 9,021 65.16 17,384 64.99 16,658 64.88 Gross margin 5,006 34.86 4,823 34.84 9,365 35.01 9,018 35.12 Expenses: Selling, general and 3,189 22.21 3,123 22.55 6,283 23.49 6,079 23.67 administrative Depreciation 398 2.77 408 2.95 795 2.97 809 3.15 Interest - net 84 0.59 76 0.55 166 0.62 154 0.60 Total expenses 3,671 25.57 3,607 26.05 7,244 27.08 7,042 27.42 Pre-tax 1,335 9.29 1,216 8.79 2,121 7.93 1,976 7.70 earnings Income tax 503 3.50 457 3.31 800 2.99 741 2.89 provision Net earnings $ 832 5.79 $ 759 5.48 $ 1,321 4.94 $ 1,235 4.81 Weighted average common shares 1,417 1,464 1,427 1,463 outstanding - basic Basic earnings per common $ 0.58 $ 0.51 $ 0.92 $ 0.84 share Weighted average common shares 1,419 1,466 1,430 1,465 outstanding - diluted Diluted earnings per $ 0.58 $ 0.51 $ 0.92 $ 0.84 common share Cash dividends $ 0.110 $ 0.090 $ 0.200 $ 0.175 per share Retained Earnings Balance at beginning of $ 18,246 $ 17,399 $ 18,307 $ 17,049 period Net earnings 832 759 1,321 1,235 Cash dividends (157 ) (133 ) (287 ) (259 ) Share (467 ) - (887 ) - repurchases Balance at end $ 18,454 $ 18,025 $ 18,454 $ 18,025 of period
Lowe's Companies , Inc. Consolidated Balance Sheets In Millions, Except Par Value Data (Unaudited) (Unaudited) July 30, 2010 July 31, 2009 January 29, 2010 Assets Current assets: Cash and cash $ 1,191 $ 1,087 $ 632 equivalents Short-term investments 816 424 425 Merchandise inventory - 8,653 8,189 8,249 net Deferred income taxes - 205 117 208 net Other current assets 256 216 218 Total current assets 11,121 10,033 9,732 Property, less accumulated 22,274 22,727 22,499 depreciation Long-term investments 730 900 277 Other assets 508 462 497 Total assets $ 34,633 $ 34,122 $ 33,005 Liabilities and Shareholders' Equity Current liabilities: Short-term borrowings $ - $ 9 $ - Current maturities of 37 552 552 long-term debt Accounts payable 4,888 4,970 4,287 Accrued compensation and 537 540 577 employee benefits Deferred revenue 770 716 683 Other current 1,761 1,672 1,256 liabilities Total current 7,993 8,459 7,355 liabilities Long-term debt, excluding 5,533 4,515 4,528 current maturities Deferred income taxes - 459 504 598 net Other liabilities 1,435 1,468 1,455 Total liabilities 15,420 14,946 13,936 Shareholders' equity: Preferred stock - $5 par value, - - - none issued Common stock -$.50 par value; Shares issued and outstanding July 30, 2010 1,423 July 31, 2009 1,477 January 29, 2010 1,459 711 738 729 Capital in excess of 9 367 6 par value Retained earnings 18,454 18,025 18,307 Accumulated other comprehensive 39 46 27 income Total shareholders' 19,213 19,176 19,069 equity Total liabilities and $ 34,633 $ 34,122 $ 33,005 shareholders' equity
Lowe's Companies , Inc. Consolidated Statements of Cash Flows (Unaudited) In Millions Six Months Ended July 30, 2010 July 31, 2009 Cash flows from operating activities: Net earnings $ 1,321 $ 1,235 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 848 870 Deferred income taxes (143 ) (106 ) Loss on property and other assets - net 16 73 Share-based payment expense 55 50 Net changes in operating assets and liabilities: Merchandise inventory - net (400 ) 32 Other operating assets (41 ) 20 Accounts payable 600 858 Other operating liabilities 526 684 Net cash provided by operating activities 2,782 3,716 Cash flows from investing activities: Purchases of investments (1,458 ) (1,108 ) Proceeds from sale/maturity of investments 609 449 Increase in other long-term assets (16 ) - Property acquired (612 ) (1,022 ) Proceeds from sale of property and other long-term 9 13 assets Net cash used in investing activities (1,468 ) (1,668 ) Cash flows from financing activities: Net decrease in short-term borrowings - (987 ) Proceeds from issuance of long-term debt 991 - Repayment of long-term debt (534 ) (16 ) Proceeds from issuance of common stock under 39 37 employee stock purchase plan Proceeds from issuance of common stock from stock 23 7 options exercised Cash dividend payments (261 ) (259 ) Repurchase of common stock (1,015 ) - Excess tax benefits of share-based payments 1 - Net cash used in financing activities (756 ) (1,218 ) Effect of exchange rate changes on cash 1 12 Net increase in cash and cash equivalents 559 842 Cash and cash equivalents, beginning of period 632 245 Cash and cash equivalents, end of period $ 1,191 $ 1,087
Source:Lowe's Companies , Inc.