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Lowe's Reports Third Quarter Sales And Earnings Results
-- Comparable Sales Increased 4.6 Percent --
-- Diluted Earnings Per Share Increased 35.6 Percent --

MOORESVILLE, N.C., Nov. 18, 2015 /PRNewswire/ -- Lowe's Companies, Inc. (NYSE: LOW) today reported net earnings of $736 million for the quarter ended October 30, 2015, a 25.8 percent increase over the same period a year ago. Diluted earnings per share increased 35.6 percent to $0.80 from $0.59 in the third quarter of 2014. For the nine months ended October 30, 2015, net earnings increased 12.8 percent from the same period a year ago to $2.5 billion, and diluted earnings per share increased 20.5 percent to $2.70.

Lowe's Companies, Inc. Logo.

Sales for the third quarter increased 5.0 percent to $14.4 billion from $13.7 billion in the third quarter of 2014, and comparable sales increased 4.6 percent. For the nine month period, sales were $45.8 billion, a 4.9 percent increase over the same period a year ago, and comparable sales increased 4.6 percent. Comparable sales for the U.S. home improvement business increased 5.0 percent for the third quarter and 4.9 percent for the nine month period.

"This is an exciting time for Lowe's as we continue to execute our strategic priorities alongside a favorable macroeconomic backdrop," commented Robert A. Niblock, Lowe's chairman, president and CEO.  "I am pleased that we delivered another solid quarter.  Comparable sales growth was driven by gains in both transactions and average ticket, while our focus on productivity and profitability also allowed us to deliver strong earnings per share growth."

"I would like to thank our employees for their purposeful commitment to serving customers, particularly those who worked diligently to assist our neighbors that were impacted by the historic flooding in South Carolina," Niblock added.

Delivering on its commitment to return excess cash to shareholders, the company repurchased $750 million of stock under its share repurchase program and paid $260 million in dividends in the third quarter. For the nine month period, the company repurchased $3.3 billion of stock under its share repurchase program and paid $700 million in dividends.

As of October 30, 2015, Lowe's operated 1,849 home improvement and hardware stores in the United States, Canada and Mexico representing 201.6 million square feet of retail selling space.

A conference call to discuss third quarter 2015 operating results is scheduled for today (Wednesday, November 18) 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 2015 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 23, 2016.

Lowe's Business Outlook

Fiscal Year 2015 (comparisons to fiscal year 2014; 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 4 to 4.5 percent.
  • The company expects to add 15 to 20 home improvement and hardware stores.
  • Earnings before interest and taxes as a percentage of sales (operating margin) are expected to increase 80 to 100 basis points.
  • The effective income tax rate is expected to be approximately 38.1%.
  • Diluted earnings per share of approximately $3.29 are expected for the fiscal year ending January 29, 2016.

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"), which the words "believe," "expect," "anticipate," "project," "will," "should," "could," and similar expressions are intended to imply. 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 these forward-looking statements including, but not limited to, changes in general economic conditions, such as the  rate of unemployment, interest rate and currency fluctuations, 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 a demographic shift from single family to multi-family housing, a reduced rate of growth in household formation, and  slower 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 necessary to realize the benefits of our strategic initiatives and  enhance our efficiency; (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 appropriately to unanticipated failures to maintain a high level of product and service quality that could result in a negative impact on customer confidence and adversely affect sales. In addition, we could experience additional impairment losses if either 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, or we are required to reduce the carrying amount of our investment in certain unconsolidated entities that are accounted for under the equity method. 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® 50 home improvement company serving approximately 16 million customers a week in the United States, Canada and Mexico through its stores and online at Lowes.com, Lowes.ca and Lowes.com.mx. With fiscal year 2014 sales of $56.2 billion, Lowe's has more than 1,845 home improvement and hardware stores and 265,000 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 30, 2015



October 31, 2014



October 30, 2015



October 31, 2014

Current Earnings




 Amount 

% Sales



 Amount 

% Sales



 Amount 

% Sales



 Amount 

% Sales

Net sales



$

14,360

100.00


$

13,681

100.00


$

45,838

100.00


$

43,682

100.00



















Cost of sales




9,370

65.25



8,963

65.51



29,856

65.13



28,471

65.18



















Gross margin




4,990

34.75



4,718

34.49



15,982

34.87



15,211

34.82



















Expenses:




































Selling, general and administrative




3,287

22.89



3,255

23.80



10,334

22.55



10,115

23.15



















Depreciation




375

2.61



375

2.74



1,115

2.43



1,123

2.57



















Interest - net




141

0.98



134

0.98



409

0.89



384

0.88



















Total expenses




3,803

26.48



3,764

27.52



11,858

25.87



11,622

26.60



















Pre-tax earnings 




1,187

8.27



954

6.97



4,124

9.00



3,589

8.22



















Income tax provision 




451

3.14



369

2.69



1,589

3.47



1,341

3.07



















Net earnings



$

736

5.13


$

585

4.28


$

2,535

5.53


$

2,248

5.15





































Weighted average common shares outstanding - basic




918




978




933




996




















Basic earnings per common share (1)



$

0.80



$

0.59



$

2.70



$

2.24




















Weighted average common shares outstanding - diluted




921




980




935




998




















Diluted earnings per common share (1)



$

0.80



$

0.59



$

2.70



$

2.24




















Cash dividends per share



$

0.28



$

0.23



$

0.79



$

0.64






































Retained Earnings


















Balance at beginning of period



$

8,533



$

10,749



$

9,591



$

11,355


Net earnings 




736




585




2,535




2,248


Cash dividends




(257)




(225)




(736)




(636)


Share repurchases




(714)




(838)




(3,092)




(2,696)


Balance at end of period



$

8,298



$

10,271



$

8,298



$

10,271






































(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 $733 million for the three months ended October 30, 2015 and $582 million for the three months ended October 31, 2014.  Net earnings allocable to common shares used in the basic and diluted earnings per share calculation were $2,523 million for the nine months ended October 30, 2015 and $2,235 million for the nine months ended October 31, 2014.





































Lowe's Companies, Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

In Millions, Except Percentage Data























Three months ended



Nine months ended





October 30, 2015



October 31, 2014



October 30, 2015



October 31, 2014





 Amount 

% Sales



 Amount 

% Sales



 Amount 

% Sales



 Amount 

% Sales

Net earnings



$

736

5.13


$

585

4.28


$

2,535

5.53


$

2,248

5.15



















Foreign currency translation adjustments - net of tax




(69)

(0.48)



(23)

(0.17)



(275)

(0.60)



(11)

(0.03)



















Other comprehensive loss




(69)

(0.48)



(23)

(0.17)



(275)

(0.60)



(11)

(0.03)



















Comprehensive income



$

667

4.65


$

562

4.11


$

2,260

4.93


$

2,237

5.12



















 

Lowe's Companies, Inc.

Consolidated Balance Sheets

In Millions, Except Par Value Data














 (Unaudited) 



 (Unaudited) 







October 30, 2015



October 31, 2014



January 30, 2015

Assets




















     Current assets:










     Cash and cash equivalents


$

1,227


$

1,562


$

466

     Short-term investments 



158



211



125

     Merchandise inventory - net



10,434



9,762



8,911

     Deferred income taxes - net 



255



261



230

     Other current assets



321



334



348











     Total current assets



12,395



12,130



10,080











     Property, less accumulated depreciation  



19,655



20,180



20,034

     Long-term investments 



382



395



354

     Other assets



1,223



1,327



1,359











     Total assets


$

33,655


$

34,032


$

31,827











Liabilities and shareholders' equity




















     Current liabilities:










     Current maturities of long-term debt


$

1,058


$

551


$

552

     Accounts payable



7,338



6,459



5,124

     Accrued compensation and employee benefits 


685



676



773

     Deferred revenue



1,084



1,029



979

     Other current liabilities



1,997



2,089



1,920











     Total current liabilities



12,162



10,804



9,348











     Long-term debt, excluding current maturities 


11,541



10,806



10,815

     Deferred income taxes - net  



-



92



97

     Deferred revenue - extended protection plans


731



736



730

     Other liabilities 



843



864



869











     Total liabilities



25,277



23,302



21,859











     Shareholders' equity:










     Preferred stock - $5 par value, none issued



-



-



-

     Common stock - $.50 par value; 










Shares issued and outstanding










October 30, 2015

917









October 31, 2014

974









January 30, 2015

960


459



487



480

     Capital in excess of par value



-



-



-

     Retained earnings



8,298



10,271



9,591

     Accumulated other comprehensive loss



(379)



(28)



(103)











     Total shareholders' equity



8,378



10,730



9,968











     Total liabilities and shareholders' equity

$

33,655


$

34,032


$

31,827





















Lowe's Companies, Inc.





Consolidated Statements of Cash Flows (Unaudited)





In Millions












Nine Months Ended



October 30, 2015


October 31, 2014

Cash flows from operating activities:





Net earnings 


$                        2,535


$                      2,248

Adjustments to reconcile net earnings to net cash provided by





operating activities:





Depreciation and amortization


1,192


1,199

Deferred income taxes


(140)


(201)

Loss on property and other assets - net


19


24

Loss on equity method investments


46


47

Share-based payment expense


84


84

Changes in operating assets and liabilities:





Merchandise inventory - net


(1,536)


(641)

Other operating assets


38


105

Accounts payable 


2,218


1,452

Other operating liabilities


90


367

Net cash provided by operating activities


4,546


4,684






Cash flows from investing activities:





Purchases of investments


(650)


(600)

Proceeds from sale/maturity of investments


588


458

Capital expenditures


(844)


(587)

Contributions to equity method investments - net


(106)


(196)

Proceeds from sale of property and other long-term assets


51


44

Other - net


(25)


(6)

Net cash used in investing activities


(986)


(887)






Cash flows from financing activities:





Net decrease in short-term borrowings


-


(386)

Net proceeds from issuance of long-term debt


1,718


1,239

Repayment of long-term debt


(541)


(36)

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


69


90

Cash dividend payments


(700)


(597)

Repurchase of common stock


(3,382)


(2,950)

Other - net


46


16

Net cash used in financing activities


(2,790)


(2,624)






Effect of exchange rate changes on cash


(9)


(2)






Net increase in cash and cash equivalents


761


1,171

Cash and cash equivalents, beginning of period


466


391

Cash and cash equivalents, end of period


$                       1,227


$                    1,562






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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