Charges for Store Closings and Discontinued Projects Reduced Earnings Per Share by
Included in the above reported results are charges related to store closings and discontinued projects which, in the aggregate, reduced pre-tax earnings for the quarter by
Sales for the quarter increased 2.3 percent to
"Our performance is not at the level we expect relative to the market," commented
"I would like to thank our hard-working employees for their ongoing dedication and customer focus during a time of significant change," Niblock added.
During the quarter, Lowe's opened eight stores. As of
A conference call to discuss third quarter 2011 operating results is scheduled for today (
Lowe's Business Outlook
Fourth Quarter 2011 - a 14-week Quarter (comparisons to fourth quarter 2010 - a 13-week quarter)
-- Total sales are expected to increase approximately 8 percent, including
the 14th week
-- The 14th week is expected to increase total sales by approximately 7
percent
-- The company expects comparable store sales of flat to 1 percent
-- Earnings before interest and taxes as a percentage of sales (operating
margin) are expected to decrease approximately 50 basis points, which
includes approximately 10 basis points impact from additional expenses
associated with previously announced store closings
-- Depreciation expense is expected to be approximately $370 million
-- Diluted earnings per share of $0.20 to $0.23 are expected
-- Lowe's fourth quarter ends on February 3, 2012 with operating results to
be publicly released on Monday, February 27, 2012
Fiscal Year 2011 - a 53-week Year (comparisons to fiscal year 2010 - a 52-week year)
-- Total sales are expected to increase 2 to 3 percent, including the 53rd
week
-- The 53rd week is expected to increase total sales by approximately 1.5
percent
-- The company expects comparable store sales to decline approximately 1
percent
-- The company expects to open approximately 25 stores in 2011
-- Earnings before interest and taxes as a percentage of sales (operating
margin) are expected to decrease 80 to 90 basis points, which includes
approximately 80 basis points impact from charges associated with store
closings and discontinued projects
-- Depreciation expense is expected to be approximately $1.5 billion
-- Diluted earnings per share of $1.37 to $1.40 are expected for the fiscal
year ending February 3, 2012 , which includes approximately $0.20 per
share impact from charges associated with store closings and
discontinued projects
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 2010 sales of
Lowe's Companies, Inc. Consolidated Statements of Current and Retained Earnings (Unaudited) In Millions, Except Per Share Data Three Months Ended Nine Months Ended October 28, 2011 October 29, 2010 October 28, 2011 October 29, 2010 Current Amount Percent Amount Percent Amount Percent Amount Percent Earnings Net sales$ 11,852 100.00$ 11,587 100.00$ 38,579 100.00$ 38,335 100.00 Cost of sales 7,815 65.94 7,526 64.95 25,208 65.34 24,909 64.98 Gross margin 4,037 34.06 4,061 35.05 13,371 34.66 13,426 35.02 Expenses: Selling, general and 3,233 27.27 2,931 25.30 9,583 24.84 9,214 24.03 administrative Depreciation 361 3.05 399 3.44 1,098 2.84 1,194 3.12 Interest - net 91 0.77 80 0.69 269 0.70 246 0.64 Total expenses 3,685 31.09 3,410 29.43 10,950 28.38 10,654 27.79 Pre-tax 352 2.97 651 5.62 2,421 6.28 2,772 7.23 earnings Income tax 127 1.07 247 2.13 904 2.35 1,047 2.73 provision Net earnings$ 225 1.90$ 404 3.49$ 1,517 3.93$ 1,725 4.50 Weighted average common shares 1,250 1,390 1,283 1,415 outstanding - basic Basic earnings per common$ 0.18 $ 0.29 $ 1.17 $ 1.21 share(1) Weighted average common shares 1,252 1,392 1,286 1,417 outstanding - diluted Diluted earnings per$ 0.18 $ 0.29 $ 1.17 $ 1.21 common share (1) Cash dividends$ 0.14 $ 0.11 $ 0.39 $ 0.31 per share Retained Earnings Balance at beginning of$ 16,060 $ 18,454 $ 17,371 $ 18,307 period Net earnings 225 404 1,517 1,725 Cash dividends (176) (154) (498) (440) Share - (560) (2,281) (1,448) repurchases Balance at end$ 16,109 $ 18,144 $ 16,109 $ 18,144 of period (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$223 million for the three months endedOctober 28, 2011 and$400 million for the three months endedOctober 29, 2010 . Net earnings allocable to common shares used in the basic and diluted earnings per share calculation were$1,505 million for the nine months endedOctober 28, 2011 and$1,710 million for the nine months endedOctober 29, 2010 .
Lowe's Companies, Inc. Consolidated Balance Sheets In Millions, Except Par Value Data (Unaudited) (Unaudited) October 28, October 29, 2010 January 28, 2011 2011 Assets Current assets: Cash and cash$ 675 $ 1,078 $ 652 equivalents Short-term 294 659 471 investments Merchandise 8,990 8,543 8,321 inventory - net Deferred income 237 202 193 taxes - net Other current 227 219 330 assets Total current 10,423 10,701 9,967 assets Property, less accumulated 21,888 22,180 22,089 depreciation Long-term 705 865 1,008 investments Other assets 850 595 635 Total assets$ 33,866 $ 34,341 $ 33,699 Liabilities and Shareholders' Equity Current liabilities: Current maturities of$ 590 $ 36 $ 36 long-term debt Accounts 5,242 4,959 4,351 payable Accrued compensation 622 678 667 and employee benefits Deferred 789 802 707 revenue Other current 1,913 1,533 1,358 liabilities Total current 9,156 8,008 7,119 liabilities Long-term debt, excluding 6,025 5,539 6,537 current maturities Deferred income 322 456 467 taxes - net Deferred revenue - extended 687 621 631 protection plans Other 867 825 833 liabilities Total 17,057 15,449 15,587 liabilities Shareholders' equity: Preferred stock -$5 par value, - - - none issued Common stock -$.50 par value; Shares issued and outstanding October 28, 1,260 2011 October 29, 1,394 2010 January 28, 1,354 630 697 677 2011 Capital in excess of par 24 6 11 value Retained 16,109 18,144 17,371 earnings Accumulated other 46 45 53 comprehensive income Total shareholders' 16,809 18,892 18,112 equity Total liabilities and$ 33,866 $ 34,341 $ 33,699 shareholders' equity
Lowe's Companies, Inc. Consolidated Statements of Cash Flows (Unaudited) In Millions Nine Months Ended October 28, 2011 October 29, 2010 Cash flows from operating activities: Net earnings$ 1,517 $ 1,725 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 1,171 1,272 Deferred income taxes (200 ) (147 ) Loss on property and other assets - net 407 72 Share-based payment expense 81 84 Net changes in operating assets and liabilities: Merchandise inventory - net (669 ) (288 ) Other operating assets 126 (25 ) Accounts payable 892 668 Other operating liabilities 567 472 Net cash provided by operating activities 3,892 3,833 Cash flows from investing activities: Purchases of investments (1,200 ) (2,033 ) Proceeds from sale/maturity of investments 1,672 1,206 Increase in other long-term assets (217 ) (53 ) Property acquired (1,264 ) (1,012 ) Proceeds from sale of property and other 26 24 long-term assets Net cash used in investing activities (983 ) (1,868 ) Cash flows from financing activities: Net proceeds from issuance of long-term - 991 debt Repayment of long-term debt (28 ) (542 ) Proceeds from issuance of common stock under 55 63 share-based payment plans Cash dividend payments (470 ) (418 ) Repurchase of common stock (2,434 ) (1,616 ) Other - net (9 ) 1 Net cash used in financing activities (2,886 ) (1,521 ) Effect of exchange rate changes on cash - 2 Net increase in cash and cash equivalents 23 446 Cash and cash equivalents, beginning of 652 632 period Cash and cash equivalents, end of period$ 675 $ 1,078
Source: Lowe's Companies, Inc.