MOORESVILLE, N.C., Aug. 20, 2014 /PRNewswire/ -- Lowe's
Companies, Inc. (NYSE: LOW) today reported net earnings of
$1.04 billion for the quarter ended
August 1, 2014, a 10.4 percent
increase over the same period a year ago. Diluted earnings per
share increased 18.2 percent to $1.04
from $0.88 in the second quarter of
2013. For the six months ended August 1,
2014, net earnings increased 12.2 percent from the same
period a year ago to $1.66 billion,
and diluted earnings per share increased 20.6 percent to
$1.64.
Logo -
http://photos.prnewswire.com/prnh/20131007/MM93272LOGO
Sales for the second quarter increased 5.7 percent to
$16.6 billion from $15.7 billion in the second quarter of 2013, and
comparable sales for the quarter increased 4.4 percent. For
the six month period, sales were $30.0
billion, a 4.2 percent increase over the same period a year
ago, and comparable sales increased 2.8 percent.
"I would like to thank our employees for their hard work during
our peak selling season, which helped us deliver solid results for
the second quarter. We were able to recover most of the
outdoor product sales missed in the first quarter due to
unfavorable weather conditions," commented Robert A. Niblock, Lowe's chairman, president
and CEO.
"We believe home improvement spending will continue to progress
in tandem with strengthening job and income growth," Niblock
added. "Our year-to-date sales performance, together with our
previous assumptions for the second half of 2014, result in a
modest reduction to our sales outlook for the year. Our
diluted earnings per share outlook is unchanged, which is a
testament to our keen focus on profitability."
Delivering on its commitment to return excess cash to
shareholders, the company repurchased $1.1
billion of stock under its share repurchase program and paid
$183 million in dividends in the
second quarter. For the six month period, the company
repurchased $2.0 billion of stock
under its share repurchase program and paid $369 million in dividends.
As of August 1, 2014, Lowe's
operated 1,837 home improvement and hardware stores in the United States, Canada and Mexico representing 200.8 million square feet
of retail selling space.
A conference call to discuss second quarter 2014 operating
results is scheduled for today (Wednesday,
August 20) at 9:00 am
ET. The conference call will be available by webcast
and can be accessed by visiting Lowe's website at
www.Lowes.com/investor and clicking on Lowe's Second Quarter 2014
Earnings Conference Call Webcast. Supplemental slides will be
available fifteen minutes prior to the start of the conference
call. A replay of the call will be archived on Lowes.com/investor
until November 18, 2014.
Lowe's Business Outlook
The company has combined its year-to-date sales performance with
its previous assumptions for the second half of 2014 when providing
the updated outlook below.
Fiscal Year 2014 (comparisons to fiscal year 2013; based
on U.S. GAAP unless otherwise noted)
- Total sales are expected to increase approximately 4.5
percent.
- Comparable sales are expected to increase approximately 3.5
percent.
- The company expects to open approximately 10 home improvement
and 5 hardware stores.
- Earnings before interest and taxes as a percentage of sales
(operating margin) are expected to increase approximately 65 basis
points.
- The effective income tax rate is expected to be approximately
37.2%.
- Diluted earnings per share of approximately $2.63 are expected for the fiscal year ending
January 30, 2015.
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 sales, earnings and performance, shareholder
value, capital expenditures, cash flows, the housing market, the
home improvement industry, demand for services, share repurchases,
the Company's strategic initiatives and any statement of an
assumption underlying any of the foregoing, constitute
"forward-looking statements" under the Act. Although we
believe that the expectations, opinions, projections, and comments
reflected in these forward-looking statements are reasonable, we
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 either expressed or implied by our forward-looking
statements including, but not limited to, changes in general
economic conditions, such as the rate 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 lower 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)
manage our business effectively as we adapt our traditional
operating model to meet the changing expectations of our customers;
(v) maintain, improve, upgrade and protect our critical information
systems; (vi) respond to fluctuations in the prices and
availability of services, supplies, and products; (vii) respond to
the growth and impact of competition; (viii) 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 (ix)
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 United States Securities and Exchange Commission
(the "SEC") and the description of material changes therein or
updated version thereof, if any, included in our Quarterly Reports
on Form 10-Q.
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" included in our Annual Report on
Form 10-K to the SEC and the description of material changes, if
any, therein included in our Quarterly Reports on Form 10-Q.
We expressly disclaim any obligation to update or revise any
forward-looking statement, whether as a result of new information,
change in circumstances, future events, or otherwise.
Lowe's Companies, Inc. (NYSE: LOW) is a FORTUNE® 100
home improvement company serving approximately 15 million customers
a week in the United States,
Canada and Mexico. With
fiscal year 2013 sales of $53.4
billion, Lowe's has more than 1,835 home improvement and
hardware stores and 260,000 employees. Founded in 1946 and
based in Mooresville, N.C., Lowe's
supports the communities it serves through programs that focus on
K-12 public education and community improvement projects. For more
information, visit Lowes.com.
Lowe's Companies,
Inc.
|
|
|
Consolidated
Statements of Current and Retained Earnings
(Unaudited)
|
|
|
In Millions, Except
Per Share and Percentage Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
|
August 1,
2014
|
|
|
August 2,
2013
|
|
|
August 1,
2014
|
|
|
August 2,
2013
|
Current
Earnings
|
|
|
|
Amount
|
Percent
|
|
|
Amount
|
Percent
|
|
|
Amount
|
Percent
|
|
|
Amount
|
Percent
|
Net
sales
|
|
|
$
|
16,599
|
100.00
|
|
$
|
15,711
|
100.00
|
|
$
|
30,001
|
100.00
|
|
$
|
28,800
|
100.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
|
10,864
|
65.45
|
|
|
10,314
|
65.65
|
|
|
19,508
|
65.02
|
|
|
18,848
|
65.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
|
|
5,735
|
34.55
|
|
|
5,397
|
34.35
|
|
|
10,493
|
34.98
|
|
|
9,952
|
34.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
|
|
3,541
|
21.33
|
|
|
3,414
|
21.73
|
|
|
6,859
|
22.87
|
|
|
6,635
|
23.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
375
|
2.26
|
|
|
367
|
2.33
|
|
|
748
|
2.49
|
|
|
719
|
2.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest -
net
|
|
|
|
126
|
0.76
|
|
|
110
|
0.70
|
|
|
250
|
0.83
|
|
|
223
|
0.77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
expenses
|
|
|
|
4,042
|
24.35
|
|
|
3,891
|
24.76
|
|
|
7,857
|
26.19
|
|
|
7,577
|
26.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
earnings
|
|
|
|
1,693
|
10.20
|
|
|
1,506
|
9.59
|
|
|
2,636
|
8.79
|
|
|
2,375
|
8.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision
|
|
|
|
654
|
3.94
|
|
|
565
|
3.60
|
|
|
973
|
3.25
|
|
|
893
|
3.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
|
$
|
1,039
|
6.26
|
|
$
|
941
|
5.99
|
|
$
|
1,663
|
5.54
|
|
$
|
1,482
|
5.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
|
|
|
995
|
|
|
|
1,067
|
|
|
|
1,005
|
|
|
|
1,077
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
common share (1)
|
|
|
$
|
1.04
|
|
|
$
|
0.88
|
|
|
$
|
1.65
|
|
|
$
|
1.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding - diluted
|
|
|
|
996
|
|
|
|
1,068
|
|
|
|
1,007
|
|
|
|
1,079
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per common share (1)
|
|
|
$
|
1.04
|
|
|
$
|
0.88
|
|
|
$
|
1.64
|
|
|
$
|
1.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per
share
|
|
|
$
|
0.23
|
|
|
$
|
0.18
|
|
|
$
|
0.41
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retained
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning
of period
|
|
|
$
|
10,985
|
|
|
$
|
12,618
|
|
|
$
|
11,355
|
|
|
$
|
13,224
|
|
Net
earnings
|
|
|
|
1,039
|
|
|
|
941
|
|
|
|
1,663
|
|
|
|
1,482
|
|
Cash
dividends
|
|
|
|
(229)
|
|
|
|
(192)
|
|
|
|
(411)
|
|
|
|
(366)
|
|
Share
repurchases
|
|
|
|
(1,046)
|
|
|
|
(863)
|
|
|
|
(1,858)
|
|
|
|
(1,836)
|
|
Balance at end of
period
|
|
|
$
|
10,749
|
|
|
$
|
12,504
|
|
|
$
|
10,749
|
|
|
$
|
12,504
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 $1,033 million for the
three months ended August 1, 2014 and $935 million for the three
months ended August 2, 2013. Net earnings allocable to common
shares used in the basic and diluted earnings per share calculation
were $1,654 million for the six months ended August 1, 2014 and
$1,472 million for the six months ended August 2, 2013.
|
Lowe's Companies,
Inc.
|
|
|
|
|
|
|
|
|
|
Consolidated
Statements of Comprehensive Income (Unaudited)
|
|
|
|
|
|
|
|
|
|
In Millions, Except
Percentage Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
|
August 1,
2014
|
|
|
August 2,
2013
|
|
|
August 1,
2014
|
|
|
August 2,
2013
|
|
|
|
|
Amount
|
Percent
|
|
|
Amount
|
Percent
|
|
|
Amount
|
Percent
|
|
|
Amount
|
Percent
|
Net
earnings
|
|
|
$
|
1,039
|
6.26
|
|
$
|
941
|
5.99
|
|
$
|
1,663
|
5.54
|
|
$
|
1,482
|
5.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments - net of tax
|
|
|
|
4
|
0.02
|
|
|
(26)
|
(0.17)
|
|
|
12
|
0.04
|
|
|
(26)
|
(0.09)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income/(loss)
|
|
|
|
4
|
0.02
|
|
|
(26)
|
(0.17)
|
|
|
12
|
0.04
|
|
|
(26)
|
(0.09)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
|
|
$
|
1,043
|
6.28
|
|
$
|
915
|
5.82
|
|
$
|
1,675
|
5.58
|
|
$
|
1,456
|
5.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lowe's Companies,
Inc.
|
Consolidated
Balance Sheets
|
In Millions, Except
Par Value Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
August 1,
2014
|
|
|
August 2,
2013
|
|
|
January 31,
2014
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,039
|
|
$
|
1,085
|
|
$
|
391
|
|
Short-term
investments
|
|
|
90
|
|
|
189
|
|
|
185
|
|
Merchandise inventory -
net
|
|
|
9,315
|
|
|
9,106
|
|
|
9,127
|
|
Deferred income taxes -
net
|
|
|
276
|
|
|
224
|
|
|
252
|
|
Other current
assets
|
|
|
355
|
|
|
309
|
|
|
341
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
11,075
|
|
|
10,913
|
|
|
10,296
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, less accumulated
depreciation
|
|
|
20,368
|
|
|
20,969
|
|
|
20,834
|
|
Long-term
investments
|
|
|
382
|
|
|
306
|
|
|
279
|
|
Other assets
|
|
|
1,312
|
|
|
1,220
|
|
|
1,323
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
33,137
|
|
$
|
33,408
|
|
$
|
32,732
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
-
|
|
$
|
-
|
|
$
|
386
|
|
Current maturities of
long-term debt
|
|
|
54
|
|
|
47
|
|
|
49
|
|
Accounts payable
|
|
|
6,191
|
|
|
5,664
|
|
|
5,008
|
|
Accrued compensation and
employee benefits
|
|
635
|
|
|
651
|
|
|
785
|
|
Deferred revenue
|
|
|
1,039
|
|
|
985
|
|
|
892
|
|
Other current
liabilities
|
|
|
2,094
|
|
|
1,993
|
|
|
1,756
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
10,013
|
|
|
9,340
|
|
|
8,876
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, excluding
current maturities
|
|
10,063
|
|
|
9,015
|
|
|
10,086
|
|
Deferred income taxes -
net
|
|
|
187
|
|
|
390
|
|
|
291
|
|
Deferred revenue - extended
protection plans
|
|
743
|
|
|
733
|
|
|
730
|
|
Other
liabilities
|
|
|
891
|
|
|
868
|
|
|
896
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
21,897
|
|
|
20,346
|
|
|
20,879
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
|
|
|
Preferred stock - $5 par
value, none issued
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Common stock - $.50 par
value;
|
|
|
|
|
|
|
|
|
|
|
Shares issued and
outstanding
|
|
|
|
|
|
|
|
|
|
|
August 1,
2014
|
991
|
|
|
|
|
|
|
|
|
|
August 2,
2013
|
1,063
|
|
|
|
|
|
|
|
|
|
January 31,
2014
|
1,030
|
|
496
|
|
|
532
|
|
|
515
|
|
Capital in excess of par
value
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Retained earnings
|
|
|
10,749
|
|
|
12,504
|
|
|
11,355
|
|
Accumulated other
comprehensive (loss)/income
|
|
(5)
|
|
|
26
|
|
|
(17)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders'
equity
|
|
|
11,240
|
|
|
13,062
|
|
|
11,853
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
33,137
|
|
$
|
33,408
|
|
$
|
32,732
|
|
|
|
|
|
|
|
|
|
|
|
|
Lowe's Companies,
Inc.
|
Consolidated
Statements of Cash Flows (Unaudited)
|
In
Millions
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
August 1,
2014
|
|
August 2,
2013
|
Cash flows from
operating activities:
|
|
|
|
|
Net
earnings
|
|
$
1,663
|
|
$
1,482
|
Adjustments to
reconcile net earnings to net cash provided by
|
|
|
|
|
operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
798
|
|
767
|
Deferred income
taxes
|
|
(137)
|
|
(56)
|
Loss on property and
other assets - net
|
|
29
|
|
12
|
Loss on equity method
investments
|
|
31
|
|
27
|
Share-based payment
expense
|
|
53
|
|
44
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Merchandise inventory
- net
|
|
(182)
|
|
(517)
|
Other operating
assets
|
|
90
|
|
4
|
Accounts
payable
|
|
1,180
|
|
1,009
|
Other operating
liabilities
|
|
398
|
|
584
|
Net cash provided
by operating activities
|
|
3,923
|
|
3,356
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Purchases of
investments
|
|
(300)
|
|
(303)
|
Proceeds from
sale/maturity of investments
|
|
293
|
|
224
|
Capital
expenditures
|
|
(384)
|
|
(376)
|
Contributions to
equity method investments - net
|
|
(151)
|
|
(113)
|
Proceeds from sale of
property and other long-term assets
|
|
24
|
|
47
|
Other -
net
|
|
(7)
|
|
3
|
Net cash used in
investing activities
|
|
(525)
|
|
(518)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Net change in
short-term borrowings
|
|
(386)
|
|
-
|
Repayment of
long-term debt
|
|
(25)
|
|
(22)
|
Proceeds from
issuance of common stock under
share-based payment plans
|
|
68
|
|
100
|
Cash dividend
payments
|
|
(369)
|
|
(352)
|
Repurchase of common
stock
|
|
(2,051)
|
|
(2,027)
|
Other -
net
|
|
12
|
|
8
|
Net cash used in
financing activities
|
|
(2,751)
|
|
(2,293)
|
|
|
|
|
|
Effect of exchange
rate changes on cash
|
|
1
|
|
(1)
|
|
|
|
|
|
Net increase in cash
and cash equivalents
|
|
648
|
|
544
|
Cash and cash
equivalents, beginning of period
|
|
391
|
|
541
|
Cash and cash
equivalents, end of period
|
|
$
1,039
|
|
$
1,085
|
|
|
|
|
|
SOURCE Lowe's Companies, Inc.