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News Release

Lowe's Reports Third Quarter Earnings

MOORESVILLE, N.C., Nov. 19 /PRNewswire-FirstCall/ -- Lowe's Companies, Inc. (NYSE: LOW), the world's second largest home improvement retailer, today reported net earnings of $643 million for the quarter ended November 2, 2007, a 10.2 percent decline over the same period a year ago. Diluted earnings per share declined 6.5 percent to $0.43 from $0.46 in the third quarter of 2006. For the nine months ended November 2, 2007, net earnings declined 3.7 percent to $2.40 billion while diluted earnings per share declined 0.6 percent to $1.58.

(Logo: http://www.newscom.com/cgi-bin/prnh/20031205/LOWLOGO )

Our ongoing commitment to maintain a safe shopping and working environment resulted in improved claims experience which led to a $112 million reduction in self-insurance liabilities for workers compensation and general liability claims. The change increased diluted earnings per share by approximately $0.05.

Sales for the quarter increased 3.2 percent to $11.6 billion, up from $11.2 billion in the third quarter of 2006. For the nine months ended November 2, 2007, sales increased 3.8 percent to $37.9 billion. Comparable store sales declined 4.3 percent for both the third quarter and first nine months of 2007.

"Our sales for the quarter fell short of our expectations, but disciplined expense management and ongoing safety initiatives combined with rational and targeted promotions enabled us to deliver earnings per share at the low end of our guidance," explained Robert A. Niblock, Lowe's chairman and CEO. "Many external factors contributed to the weak sales environment, including a continuing housing correction, drought conditions in several U.S. markets, and slower than expected sales in Gulf Coast markets. Clearly the largest of these impacts was the unstable housing environment evidenced by an even steeper decline in housing turnover, falling home prices in many markets, and a near record inventory of homes for sale. Despite these factors, Lowe's continues to gain market share according to third party estimates.

"The home improvement consumer remains pressured by the ongoing housing correction, tighter credit standards in the mortgage market, and rising financial obligations, but we believe our guidance for the fourth quarter reflects these factors and is appropriately conservative given the uncertainties that exist," Niblock concluded. "Pressures on our industry are likely to continue well into 2008, but we remain committed to our goal of providing great products and unmatched customer service and capitalizing on opportunities to ensure we gain profitable market share regardless of the level of industry growth."

During the quarter, Lowe's opened 40 new stores. As of November 2, 2007, Lowe's operated 1,464 stores in 49 states representing 166.1 million square feet of retail selling space, a 10.1 percent increase over last year. A conference call to discuss third quarter 2007 operating results is scheduled for today (Monday, November 19) at 9:00 a.m. EST. Please dial 888-817-4020 (international callers dial 706-679-8762) to participate. A webcast of the call will take place simultaneously and can be accessed by visiting Lowe's website at www.Lowes.com/investor and clicking on Lowe's Third Quarter 2007

Earnings Conference Call Webcast. A replay of the call will be archived on Lowes.com until February 24, 2008.

    Lowe's Business Outlook

    Fourth Quarter 2007 (comparisons to fourth quarter 2006)
    -- The company expects to open approximately 72 new stores reflecting
       square footage growth of approximately 11 percent
    -- Total sales are expected to increase approximately 3 percent
    -- The company expects comparable store sales to decline 3 to 5 percent
    -- Operating margin (defined as gross margin less SG&A and depreciation)
       is expected to decline approximately 280 basis points driven by
       payroll, incentive compensation, depreciation and other fixed cost de-
       leverage
    -- Store opening costs are expected to be approximately $56 million
    -- Diluted earnings per share of $0.25 to $0.29 are expected
    -- Lowe's fourth quarter ends on February 1, 2008 with operating results
       to be publicly released on Monday, February 25, 2008

    Fiscal Year 2007 (comparisons to fiscal year 2006)
    -- The company expects to open approximately 153 stores in 2007 reflecting
       total square footage growth of approximately 11 percent
    -- Total sales are expected to increase 3 to 4 percent
    -- The company expects comparable store sales to decline approximately 4
       percent
    -- Operating margin (defined as gross margin less SG&A and depreciation)
       is expected to decline approximately 130 basis points
    -- Store opening costs are expected to be approximately $135 million
    -- Diluted earnings per share of $1.83 to $1.87 are expected for the
       fiscal year ending February 1, 2008

    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, demand for services, 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 interest rate and currency fluctuations, higher fuel and other energy costs, slower growth in personal income, declining housing turnover, the availability 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 a greater or longer than expected downturn in the housing industry and the level of repairs, remodeling, and additions to existing homes, as well as 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 legal and regulatory developments; and (viii) respond to unanticipated weather conditions that could adversely affect sales. For more information about these and other risks and uncertainties that we are exposed to, you should read the "Risk Factors" included in our Annual Report on Form 10-K to the United States Securities and Exchange Commission and the descriptions of material changes, if any, in those "Risk Factors" included in our Quarterly Reports on Form 10-Q.

The forward-looking statements contained in this news release speak only as of the date of this release and the company does not assume any obligation to update any such statements.

With fiscal year 2006 sales of $46.9 billion, Lowe's Companies, Inc. is a FORTUNE(R) 50 company that serves approximately 13 million customers a week at more than 1,450 home improvement stores in 49 states. Founded in 1946 and based in Mooresville, N.C., Lowe's is the second-largest home improvement retailer in the world. For more information, visit Lowes.com.



    Lowe's Companies, Inc.
    Consolidated Statements of Current and Retained Earnings (Unaudited)
    In Millions, Except Per Share Data


                                                 Three Months Ended
                                             Nov. 2, 2007    Nov. 3, 2006
    Current Earnings                       Amount  Percent  Amount  Percent

    Net sales                             $11,565  100.00  $11,211  100.00
    Cost of sales                           7,601   65.73    7,346   65.53
    Gross margin                            3,964   34.27    3,865   34.47
    Expenses:
    Selling, general and
     administrative                         2,503   21.63    2,320   20.70
    Store opening costs                        41    0.36       44    0.39
    Depreciation                              340    2.94      297    2.65
    Interest - net                             50    0.43       45    0.40
    Total expenses                          2,934   25.36    2,706   24.14
    Pre-tax earnings                        1,030    8.91    1,159   10.33
    Income tax provision                      387    3.35      443    3.94
    Net earnings                             $643    5.56     $716    6.39

    Weighted average shares
     outstanding - basic                    1,470            1,522
    Basic earnings per share                $0.44            $0.47
    Weighted average shares
     outstanding - diluted                  1,497            1,551
    Diluted earnings per share              $0.43            $0.46
    Cash dividends per share                $0.08            $0.05

    Retained Earnings
    Balance at beginning of period        $15,210          $13,843
    Cumulative effect adjustment(1)             -                -
    Net earnings                              643              716
    Cash dividends                           (118)             (76)
    Share repurchases                        (454)            (160)
    Balance at end of period              $15,281          $14,323



    Lowe's Companies, Inc.
    Consolidated Statements of Current and Retained Earnings (Unaudited)
    In Millions, Except Per Share Data

                                                 Nine Months Ended
                                           Nov. 2, 2007     Nov. 3, 2006
    Current Earnings                      Amount  Percent  Amount  Percent

    Net sales                             $37,904  100.00  $36,522  100.00
    Cost of sales                          24,798   65.42   24,011   65.74
    Gross margin                           13,106   34.58   12,511   34.26
    Expenses:
    Selling, general and
     administrative                         8,026   21.17    7,404   20.27
    Store opening costs                        79    0.21       97    0.27
    Depreciation                              995    2.63      854    2.34
    Interest - net                            148    0.39      110    0.30
    Total expenses                          9,248   24.40    8,465   23.18
    Pre-tax earnings                        3,858   10.18    4,046   11.08
    Income tax provision                    1,457    3.85    1,554    4.26
    Net earnings                           $2,401    6.33   $2,492    6.82

    Weighted average shares
     outstanding - basic                    1,490            1,540
    Basic earnings per share                $1.61            $1.62
    Weighted average shares
     outstanding - diluted                  1,519            1,571
    Diluted earnings per share              $1.58            $1.59
    Cash dividends per share                $0.21            $0.13

    Retained Earnings
    Balance at beginning of period        $14,860          $12,191
    Cumulative effect adjustment 1             (8)               -
    Net earnings                            2,401            2,492
    Cash dividends                           (312)            (200)
    Share repurchases                      (1,660)            (160)
    Balance at end of period              $15,281          $14,323


    (1) The Company adopted FIN 48, Accounting for Uncertainty in Income
    Taxes, effective February 3, 2007.



    Lowe's Companies, Inc.
    Consolidated Balance Sheets
    In Millions, Except Par Value Data

                                             (Unaudited) (Unaudited)
                                               Nov. 2,     Nov. 3,    Feb. 3,
                                                2007        2006       2007
    Assets

       Current assets:
         Cash and cash equivalents              $336        $657       $364
         Short-term investments                  231         464        432
         Merchandise inventory - net           7,775       7,219      7,144
         Deferred income taxes - net             241         157        161
         Other current assets                    193         125        213

         Total current assets                  8,776       8,622      8,314

         Property, less accumulated
          depreciation                        20,755      18,188     18,971
         Long-term investments                   333         121        165
         Other assets                            325         242        317

         Total assets                        $30,189     $27,173    $27,767

    Liabilities and shareholders' equity

       Current liabilities:
         Short-term borrowings                   $16          $-        $23
         Current maturities of long-term
          debt                                    35          89         88
         Accounts payable                      3,895       3,416      3,524
         Accrued salaries and wages              437         432        425
         Self-insurance liabilities              653         616        650
         Deferred revenue                        793         846        731
         Other current liabilities             1,363       1,315      1,098

         Total current liabilities             7,192       6,714      6,539

         Long-term debt, excluding current
          maturities                           5,580       4,337      4,325
         Deferred income taxes - net             615         683        735
         Other liabilities                       748         353        443

         Total liabilities                    14,135      12,087     12,042

       Shareholders' equity:
         Preferred stock - $5 par value,
          none issued                              -           -          -
         Common stock - $.50 par value;
          Shares issued and outstanding
          November 2, 2007        1,470
          November 3, 2006        1,520
          February 2, 2007        1,525          735         760        762
         Capital in excess of par value           20           -        102
         Retained earnings                    15,281      14,323     14,860
         Accumulated other comprehensive
          income                                  18           3          1

         Total shareholders' equity           16,054      15,086     15,725

         Total liabilities and
          shareholders' equity               $30,189     $27,173    $27,767



    Lowe's Companies, Inc.
    Consolidated Statements of Cash Flows (Unaudited)
    In Millions

                                                       Nine Months Ended
                                                 Nov. 2, 2007     Nov. 3, 2006
    Cash flows from operating activities:
      Net earnings                                  $2,401            $2,492
        Adjustments to reconcile net
         earnings to net cash provided
         by operating activities:
        Depreciation and amortization                1,069               907
        Deferred income taxes                          (42)              (54)
        Loss on disposition/writedown of
         fixed and other assets                         33                35
        Share-based payment expense                     69                56
        Changes in operating assets and
         liabilities:
          Merchandise inventory - net                 (630)             (584)
          Other operating assets                        43               (26)
          Accounts payable                             368               584
          Other operating liabilities                  474               233
      Net cash provided by operating
       activities                                    3,785             3,643

    Cash flows from investing activities:
      Purchases of short-term investments             (592)             (248)
      Proceeds from sale/maturity of
       short-term investments                          853               490
      Purchases of long-term investments            (1,286)             (225)
      Proceeds from sale/maturity of
       long-term investments                         1,057               141
      Increase in other long-term assets               (20)               (8)
      Fixed assets acquired                         (2,912)           (2,724)
      Proceeds from the sale of fixed and
       other long-term assets                           51                30
      Net cash used in investing activities         (2,849)           (2,544)

    Cash flows from financing activities:
      Net decrease in short-term borrowings             (9)                -
      Proceeds from issuance of long-term
       debt                                          1,294               991
      Repayment of long-term debt                      (89)              (24)
      Proceeds from issuance of common
       stock under employee stock purchase
       plan                                             40                36
      Proceeds from issuance of common
       stock from stock options exercised               58                64
      Cash dividend payments                          (312)             (200)
      Repurchase of common stock                    (1,950)           (1,737)
      Excess tax benefits of share-based
       payments                                          4                 5
      Net cash used in financing activities           (964)             (865)

      Net (decrease) increase in cash and
       cash equivalents                                (28)              234
      Cash and cash equivalents, beginning
       of period                                       364               423
      Cash and cash equivalents, end of
       period                                         $336              $657

SOURCE  Lowe's Companies, Inc.
    -0-                             11/19/2007
    /CONTACT: Shareholders'-Analysts' Inquiries:  Robbin Moore-Randolph,
+1-704-758-3579, or Media Inquiries: Chris Ahearn, +1-704-758-2304, both of
Lowe's Companies, Inc./
    /Photo:  NewsCom:  http://www.newscom.com/cgi-bin/prnh/20031205/LOWLOGO
              AP Archive:  http://photoarchive.ap.org
              PRN Photo Desk, photodesk@prnewswire.com/
    /Web site:  http://www.lowes.com
                http://www.Lowes.com/investor /
    (LOW)

CO:  Lowe's Companies, Inc.
ST:  North Carolina
IN:  REA CST
SU:  ERN CCA ERP

TC-JK
-- CLM014A --
3102 11/19/2007 07:00 EST http://www.prnewswire.com