-- Third Quarter Net Earnings Increased 17.4 Percent --
-- Third Quarter Diluted Earnings Per Share Increased 26.1 Percent --
Included in the above reported results, the company recognized a charge related to an evaluation of the carrying value of long-lived assets, including two stores that closed on
Sales for the quarter increased 1.9 percent to
"Thanks to the dedication of our 238,000+ employees, we delivered solid results for the quarter despite the continued sluggishness of the economic recovery," said
During the quarter,
A conference call to discuss third quarter 2010 operating results is scheduled for today (
Lowe's Business Outlook
Fourth Quarter 2010 (comparisons to fourth quarter 2009)
-- The company expects to open approximately 17 stores reflecting square
footage growth of approximately 2 percent
-- Total sales are expected to increase 2 to 4 percent
-- The company expects comparable store sales to increase 0 to 2 percent
-- Earnings before interest and taxes as a percentage of sales (operating
margin) is expected to increase approximately 80 basis points
-- Depreciation expense is expected to be approximately $400 million
-- Diluted earnings per share of $0.16 to $0.19 are expected
-- Lowe's fourth quarter ends on January 28, 2011 with operating results to
be publicly released on Wednesday, February 23, 2011
Fiscal Year 2010 (comparisons to fiscal year 2009)
-- The company expects to open approximately 42 stores in 2010 reflecting
total square footage growth of approximately 2 percent
-- Total sales are expected to increase 3 to 4 percent
-- The company expects comparable store sales to increase 1 to 2 percent
-- Earnings before interest and taxes as a percentage of sales (operating
margin) is expected to increase 50 to 60 basis points
-- Depreciation expense is expected to be approximately $1.60 billion
-- Diluted earnings per share of $1.37 to $1.40 are expected for the fiscal
year ending January 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 Nine Months Ended October 29, 2010 October 30, 2009 October 29, 2010 October 30, 2009 Current Amount Percent Amount Percent Amount Percent Amount Percent Earnings Net sales $ 11,587 100.00 $ 11,375 100.00 $ 38,335 100.00 $ 37,052 100.00 Cost of sales 7,526 64.95 7,485 65.80 24,909 64.98 24,143 65.16 Gross margin 4,061 35.05 3,890 34.20 13,426 35.02 12,909 34.84 Expenses: Selling, general and 2,931 25.30 2,882 25.34 9,214 24.03 8,962 24.19 administrative Depreciation 399 3.44 403 3.54 1,194 3.12 1,212 3.27 Interest - net 80 0.69 77 0.68 246 0.64 231 0.62 Total expenses 3,410 29.43 3,362 29.56 10,654 27.79 10,405 28.08 Pre-tax 651 5.62 528 4.64 2,772 7.23 2,504 6.76 earnings Income tax 247 2.13 184 1.62 1,047 2.73 926 2.50 provision Net earnings $ 404 3.49 $ 344 3.02 $ 1,725 4.50 $ 1,578 4.26 Weighted average common shares 1,390 1,466 1,415 1,464 outstanding - basic Basic earnings per common $ 0.29 $ 0.23 $ 1.21 $ 1.07 share(1) Weighted average common shares 1,392 1,469 1,417 1,466 outstanding - diluted Diluted earnings per $ 0.29 $ 0.23 $ 1.21 $ 1.07 common share (1) Cash dividends $ 0.110 $ 0.090 $ 0.310 $ 0.265 per share Retained Earnings Balance at beginning of $ 18,454 $ 18,025 $ 18,307 $ 17,049 period Net earnings 404 344 1,725 1,578 Cash dividends (154 ) (133 ) (440 ) (391 ) Share (560 ) - (1,448 ) - repurchases Balance at end $ 18,144 $ 18,236 $ 18,144 $ 18,236 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$400 million and$1,710 million for the three and nine months endedOctober 29, 2010 , respectively, and$341 million and$1,566 million for the three and nine months endedOctober 30, 2009 , respectively.
Lowe's Companies , Inc. Consolidated Balance Sheets In Millions, Except Par Value Data (Unaudited) (Unaudited) October 29, 2010 October 30, 2009 January 29, 2010 Assets Current assets: Cash and cash $ 1,078 $ 1,141 $ 632 equivalents Short-term 659 509 425 investments Merchandise 8,543 8,424 8,249 inventory - net Deferred income 202 144 208 taxes - net Other current 219 213 218 assets Total current 10,701 10,431 9,732 assets Property, less accumulated 22,180 22,557 22,499 depreciation Long-term 865 864 277 investments Other assets 595 496 497 Total assets $ 34,341 $ 34,348 $ 33,005 Liabilities and Shareholders' Equity Current liabilities: Current maturities of $ 36 $ 553 $ 552 long-term debt Accounts 4,959 5,046 4,287 payable Accrued compensation 678 558 577 and employee benefits Deferred 802 719 683 revenue Other current 1,533 1,613 1,256 liabilities Total current 8,008 8,489 7,355 liabilities Long-term debt, excluding 5,539 4,524 4,528 current maturities Deferred income 456 495 598 taxes - net Other 1,446 1,421 1,455 liabilities Total 15,449 14,929 13,936 liabilities Shareholders' equity: Preferred stock - $5 par value, - - - none issued Common stock - $.50 par value; Shares issued and outstanding October 29, 1,394 2010 October 30, 1,477 2009 January 29, 1,459 697 739 729 2010 Capital in excess of par 6 398 6 value Retained 18,144 18,236 18,307 earnings Accumulated other 45 46 27 comprehensive income Total shareholders' 18,892 19,419 19,069 equity Total liabilities and $ 34,341 $ 34,348 $ 33,005 shareholders' equity
Lowe's Companies , Inc. Consolidated Statements of Cash Flows (Unaudited) In Millions Nine Months Ended October 29, 2010 October 30, 2009 Cash flows from operating activities: Net earnings $ 1,725 $ 1,578 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 1,272 1,303 Deferred income taxes (147 ) (142 ) Loss on property and other assets - net 72 140 Share-based payment expense 84 78 Net changes in operating assets and liabilities: Merchandise inventory - net (288 ) (203 ) Other operating assets (25 ) (4 ) Accounts payable 668 933 Other operating liabilities 472 684 Net cash provided by operating activities 3,833 4,367 Cash flows from investing activities: Purchases of investments (2,033 ) (1,487 ) Proceeds from sale/maturity of investments 1,206 777 Increase in other long-term assets (53 ) (19 ) Property acquired (1,012 ) (1,414 ) Proceeds from sale of property and other 24 17 long-term assets Net cash used in investing activities (1,868 ) (2,126 ) Cash flows from financing activities: Net decrease in short-term borrowings - (1,002 ) Proceeds from issuance of long-term debt - 991 3 net Repayment of long-term debt (542 ) (27 ) Proceeds from issuance of common stock 63 59 under share-based payment plans Cash dividend payments (418 ) (391 ) Repurchase of common stock (1,616 ) (4 ) Excess tax benefits of share-based 1 - payments Net cash used in financing activities (1,521 ) (1,362 ) Effect of exchange rate changes on cash 2 17 Net increase in cash and cash equivalents 446 896 Cash and cash equivalents, beginning of 632 245 period Cash and cash equivalents, end of period $ 1,078 $ 1,141
Source: Lowe's Companies , Inc.