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Lowe's Reports Third Quarter Sales And Earnings Results
-- Comparable Sales Increased 5.1 Percent --
-- Diluted Earnings Per Share Increased 25.5 Percent --

MOORESVILLE, N.C., Nov. 19, 2014 /PRNewswire/ -- Lowe's Companies, Inc. (NYSE: LOW) today reported net earnings of $585 million for the quarter ended October 31, 2014, a 17.3 percent increase over the same period a year ago. Diluted earnings per share increased 25.5 percent to $0.59 from $0.47 in the third quarter of 2013. For the nine months ended October 31, 2014, net earnings increased 13.5 percent from the same period a year ago to $2.25 billion, and diluted earnings per share increased 21.7 percent to $2.24

Lowe's Companies, Inc. Logo

Sales for the third quarter increased 5.6 percent to $13.7 billion from $13.0 billion in the third quarter of 2013, and comparable sales for the quarter increased 5.1 percent.  For the nine month period, sales were $43.7 billion, a 4.6 percent increase over the same period a year ago, and comparable sales increased 3.5 percent.

"Our employees' unwavering commitment to serving customers helped us achieve this quarter's strong results," commented Robert A. Niblock, Lowe's chairman, president and CEO.  "We are pleased with our performance, and continue to be cautiously optimistic about the home improvement landscape."

Delivering on its commitment to return excess cash to shareholders, the company repurchased $900 million of stock under its share repurchase program and paid $229 million in dividends in the third quarter.  For the nine month period, the company repurchased $2.9 billion of stock under its share repurchase program and paid $597 million in dividends. 

As of October 31, 2014, Lowe's operated 1,836 home improvement and hardware stores in the United States, Canada and Mexico representing 200.7 million square feet of retail selling space.

A conference call to discuss third quarter 2014 operating results is scheduled for today (Wednesday, November 19) 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 Third 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 February 24, 2015.

Lowe's Business Outlook

The company has combined its year-to-date performance with its previous assumptions for the fourth quarter in 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 4.5 to 5 percent.
  • Comparable sales are expected to increase 3.5 to 4 percent.
  • The company expects to open 6 home improvement and 4 hardware stores.
  • Earnings before interest and taxes as a percentage of sales (operating margin) are expected to increase 70 to 75 basis points.
  • The effective income tax rate is expected to be approximately 37.2%.
  • Diluted earnings per share of approximately $2.68 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 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 moderating rates of growth in housing renovation and repair activity, as well as uneven recovery 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 from data security breaches and other cyber threats; (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



Nine months ended



October 31, 2014



November 1, 2013



October 31, 2014



November 1, 2013

Current Earnings


 Amount 

Percent



 Amount 

Percent



 Amount 

Percent



 Amount 

Percent

Net sales

$

13,681

100.00


$

12,957

100.00


$

43,682

100.00


$

41,757

100.00

















Cost of sales


8,963

65.51



8,476

65.42



28,471

65.18



27,323

65.43

















Gross margin


4,718

34.49



4,481

34.58



15,211

34.82



14,434

34.57

















Expenses:
































Selling, general and administrative


3,255

23.80



3,184

24.56



10,115

23.15



9,820

23.52

















Depreciation


375

2.74



373

2.88



1,123

2.57



1,092

2.62

















Interest - net


134

0.98



125

0.97



384

0.88



348

0.83

















Total expenses


3,764

27.52



3,682

28.41



11,622

26.60



11,260

26.97

















Pre-tax earnings 


954

6.97



799

6.17



3,589

8.22



3,174

7.60

















Income tax provision 


369

2.69



300

2.32



1,341

3.07



1,194

2.86

















Net earnings

$

585

4.28


$

499

3.85


$

2,248

5.15


$

1,980

4.74

































Weighted average common shares outstanding - basic


978




1,047




996




1,067


















Basic earnings per common share (1)

$

0.59



$

0.47



$

2.24



$

1.84


















Weighted average common shares outstanding - diluted


980




1,049




998




1,069


















Diluted earnings per common share (1)

$

0.59



$

0.47



$

2.24



$

1.84


















Cash dividends per share

$

0.23



$

0.18



$

0.64



$

0.52


































Retained Earnings
















Balance at beginning of period

$

10,749



$

12,504



$

11,355



$

13,224


Net earnings 


585




499




2,248




1,980


Cash dividends


(225)




(189)




(636)




(555)


Share repurchases


(838)




(711)




(2,696)




(2,546)


Balance at end of period

$

10,271



$

12,103



$

10,271



$

12,103


































(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 $582 million for the three months ended October 31, 2014 and $495 million for the three months ended November 1, 2013. Net earnings allocable to common shares used in the basic and diluted earnings per share calculation were $2,235 million for the nine months ended October 31, 2014 and $1,967 million for the nine months ended November 1, 2013.

































Lowe's Companies, Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

In Millions, Except Percentage Data



















Three months ended



Nine months ended



October 31, 2014



November 1, 2013



October 31, 2014



November 1, 2013



 Amount 

Percent



 Amount 

Percent



 Amount 

Percent



 Amount 

Percent

Net earnings

$

585

4.28


$

499

3.85


$

2,248

5.15


$

1,980

4.74

















Foreign currency translation adjustments - net of tax


(23)

(0.17)



(4)

(0.03)



(11)

(0.03)



(29)

(0.07)

















Other comprehensive loss


(23)

(0.17)



(4)

(0.03)



(11)

(0.03)



(29)

(0.07)

















Comprehensive income

$

562

4.11


$

495

3.82


$

2,237

5.12


$

1,951

4.67


 

 

Lowe's Companies, Inc.

Consolidated Balance Sheets

In Millions, Except Par Value Data














 (Unaudited) 



 (Unaudited) 







October 31, 2014



November 1, 2013



January 31, 2014

Assets




















     Current assets:










     Cash and cash equivalents


$

1,562


$

1,101


$

391

     Short-term investments 



211



115



185

     Merchandise inventory - net



9,762



9,593



9,127

     Deferred income taxes - net 



261



220



252

     Other current assets



334



336



341











     Total current assets



12,130



11,365



10,296











     Property, less accumulated depreciation  



20,180



20,973



20,834

     Long-term investments 



395



439



279

     Other assets



1,327



1,300



1,323











     Total assets


$

34,032


$

34,077


$

32,732











Liabilities and shareholders' equity




















     Current liabilities:










     Short-term borrowings


$

-


$

-


$

386

     Current maturities of long-term debt



551



51



49

     Accounts payable



6,459



5,776



5,008

     Accrued compensation and employee benefits 



676



705



785

     Deferred revenue



1,029



944



892

     Other current liabilities



2,089



1,927



1,756











     Total current liabilities



10,804



9,403



8,876











     Long-term debt, excluding current maturities 



10,806



10,090



10,086

     Deferred income taxes - net  



92



322



291

     Deferred revenue - extended protection plans



736



730



730

     Other liabilities 



864



881



896











     Total liabilities



23,302



21,426



20,879











     Shareholders' equity:










     Preferred stock - $5 par value, none issued



-



-



-

     Common stock - $.50 par value; 










Shares issued and outstanding










October 31, 2014

974









November 1, 2013

1,050









January 31, 2014

1,030


487



525



515

     Capital in excess of par value



-



-



-

     Retained earnings



10,271



12,103



11,355

     Accumulated other comprehensive (loss)/income



(28)



23



(17)











     Total shareholders' equity



10,730



12,651



11,853











     Total liabilities and shareholders' equity


$

34,032


$

34,077


$

32,732


 

 

Lowe's Companies, Inc.

Consolidated Statements of Cash Flows (Unaudited)

In Millions






Nine Months Ended


October 31, 2014


November 1, 2013

Cash flows from operating activities:




Net earnings 

$                   2,248


$                      1,980

Adjustments to reconcile net earnings to net cash provided by




operating activities:




Depreciation and amortization

1,199


1,167

Deferred income taxes

(201)


(117)

Loss on property and other assets - net

24


22

Loss on equity method investments

47


41

Share-based payment expense

84


70

Changes in operating assets and liabilities:




Merchandise inventory - net

(641)


(847)

Other operating assets

105


(11)

Accounts payable 

1,452


1,063

Other operating liabilities

367


491

Net cash provided by operating activities

4,684


3,859





Cash flows from investing activities:




Purchases of investments

(600)


(530)

Proceeds from sale/maturity of investments

458


391

Capital expenditures

(587)


(610)

Contributions to equity method investments - net

(196)


(137)

Proceeds from sale of property and other long-term assets

44


62

Acquisition of business - net

-


(203)

Other - net

(6)


4

Net cash used in investing activities

(887)


(1,023)





Cash flows from financing activities:




Net change in short-term borrowings

(386)


-

Net proceeds from issuance of long-term debt

1,239


985

Repayment of long-term debt

(36)


(34)

Proceeds from issuance of common stock under
   share-based payment plans

90


117

Cash dividend payments

(597)


(543)

Repurchase of common stock

(2,950)


(2,797)

Other - net

16


(1)

Net cash used in financing activities

(2,624)


(2,273)





Effect of exchange rate changes on cash

(2)


(3)





Net increase in cash and cash equivalents

1,171


560

Cash and cash equivalents, beginning of period

391


541

Cash and cash equivalents, end of period

$                  1,562


$                    1,101


 

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SOURCE Lowe's Companies, Inc.

Shareholders'/Analysts' Inquiries: Tiffany Mason, 704-758-2033, tiffany.l.mason@lowes.com; Media Inquiries: Chris Ahearn, 704-758-2304, chris.c.ahearn@lowes.com