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News Release

Lowe's Reports Third Quarter Sales and Earnings Results

MOORESVILLE, N.C., Nov. 17 /PRNewswire-FirstCall/ -- Lowe's Companies, Inc. (NYSE: LOW), the world's second largest home improvement retailer, today reported net earnings of $488 million for the quarter ended October 31, 2008, a 24.1 percent decline from the same period a year ago. Diluted earnings per share declined 23.3 percent to $0.33 from $0.43 in the third quarter of 2007. For the nine months ended October 31, 2008, net earnings declined 15.3 percent to $2.03 billion while diluted earnings per share declined 12.7 percent to $1.38.

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

Sales for the quarter increased 1.4 percent to $11.7 billion, up from $11.6 billion in the third quarter of 2007. For the nine months ended October 31, 2008, sales increased 0.9 percent to $38.2 billion. Comparable store sales for the third quarter declined 5.9 percent and declined 6.5 percent in the first nine months of 2008.

"Thanks to our employees' hard work and dedication in this difficult environment, we achieved sales results within our guidance and earnings that exceeded our guidance," commented Robert A. Niblock, Lowe's chairman and CEO. "During the quarter, products related to ongoing home maintenance and outdoor projects continued to perform relatively well. Also, we experienced a hurricane-related sales lift in the Gulf Coast as residents repaired storm damage. However, consumers continued to delay discretionary home improvement and bigger ticket purchases, which resulted in negative comparable store sales in the quarter.

"We expect continued, broad-based external pressures on our industry, as rising unemployment, falling home prices, tight credit and volatile equity markets continue to erode consumer confidence and impact sales," Niblock added. "While falling energy prices and initial signs of stabilization in housing turnover should aid the consumer, we saw a decline in sales trends in the last week of October that continued into November as the overall economic outlook deteriorated. In light of the difficult environment, we remain cautious in the near term and focused on providing great service to customers, increasing market share, controlling expenses, and appropriately managing capital expenditures to drive long-term returns for shareholders."

During the quarter, Lowe's opened 39 new stores. As of October 31, 2008, Lowe's operated 1,616 stores in the United States and Canada representing 183.0 million square feet of retail selling space, a 10.2 percent increase over last year.

A conference call to discuss third quarter 2008 operating results is scheduled for today (Monday, November 17) at 9:00 am 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 2008 Earnings Conference Call Webcast. A replay of the call will be archived on Lowes.com until February 19, 2009.

    Lowe's Business Outlook

    Fourth Quarter 2008 (comparisons to fourth quarter 2007)
    -- The company expects to open 33 to 38 new stores reflecting square
       footage growth of 7 to 8 percent
    -- Total sales are expected to range from a decline of 3 percent to an
       increase of 2 percent
    -- The company expects comparable store sales to decline 5 to 10 percent
    -- Earnings before interest and taxes as a percentage of sales (operating
       margin) is expected to decline approximately 330 basis points driven by
       payroll, fixed cost and depreciation deleverage
    -- Store opening costs are expected to be approximately $31 million
    -- Diluted earnings per share of $0.08 to $0.16 are expected
    -- Lowe's fourth quarter ends on January 30, 2009 with operating results
       to be publicly released on Friday, February 20, 2009


    Fiscal Year 2008 (comparisons to fiscal year 2007)
    -- The company expects to open 115 to 120 stores in 2008 reflecting total
       square footage growth of 7 to 8 percent
    -- Total sales are expected to range from flat to an increase of 1
       percent
    -- The company expects comparable store sales to decline 6 to 7 percent
    -- Earnings before interest and taxes as a percentage of sales (operating
       margin) is expected to decline approximately 190 basis points
    -- Store opening costs are expected to be approximately $100 million
    -- Diluted earnings per share of $1.46 to $1.54 are expected for the
       fiscal year ending January 30, 2009

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, 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 rising unemployment, interest rate and currency fluctuations, higher fuel and other energy costs, slower growth in personal income, changes in consumer spending, the availability of consumer credit and mortgage financing, changes in the rate of housing turnover, 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 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 description 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 2007 sales of $48.3 billion, Lowe's Companies, Inc. is a FORTUNE(R) 50 company that serves approximately 14 million customers a week at more than 1,600 home improvement stores in the United States and Canada. 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
                                         October 31, 2008   November 2, 2007
    Current Earnings                      Amount  Percent    Amount  Percent

    Net sales                             $11,728  100.00    $11,565  100.00

    Cost of sales                           7,743   66.02      7,601   65.73

    Gross margin                            3,985   33.98      3,964   34.27

    Expenses:

    Selling, general and administrative     2,726   23.23      2,503   21.63

    Store opening costs                        31    0.27         41    0.36

    Depreciation                              385    3.29        340    2.94

    Interest - net                             65    0.56         50    0.43

    Total expenses                          3,207   27.35      2,934   25.36

    Pre-tax earnings                          778    6.63      1,030    8.91

    Income tax provision                      290    2.47        387    3.35

    Net earnings                             $488    4.16       $643    5.56


    Weighted average shares outstanding -
     basic                                  1,459              1,470

    Basic earnings per share                $0.33              $0.44

    Weighted average shares outstanding -
     diluted                                1,464              1,497

    Diluted earnings per share              $0.33              $0.43

    Cash dividends per share               $0.085             $0.080


    Retained Earnings

    Balance at beginning of period        $16,648            $15,210
    Cumulative effect adjustment (1)            -                  -
    Net earnings                              488                643
    Cash dividends                           (124)              (118)
    Share repurchases                           -               (454)
    Balance at end of period              $17,012            $15,281



                                                   Nine Months Ended
                                         October 31, 2008   November 2, 2007
    Current Earnings                      Amount  Percent    Amount  Percent

    Net sales                             $38,246  100.00    $37,904  100.00

    Cost of sales                          25,113   65.66     24,798   65.42

    Gross margin                           13,133   34.34     13,106   34.58

    Expenses:

    Selling, general and administrative     8,464   22.13      8,026   21.17

    Store opening costs                        70    0.18         79    0.21

    Depreciation                            1,142    2.99        995    2.63

    Interest - net                            210    0.55        148    0.39

    Total expenses                          9,886   25.85      9,248   24.40

    Pre-tax earnings                        3,247    8.49      3,858   10.18

    Income tax provision                    1,214    3.17      1,457    3.85

    Net earnings                           $2,033    5.32     $2,401    6.33


    Weighted average shares outstanding -
     basic                                  1,456              1,490

    Basic earnings per share                $1.40              $1.61

    Weighted average shares outstanding -
     diluted                                1,473              1,519

    Diluted earnings per share              $1.38              $1.58

    Cash dividends per share               $0.250             $0.210


    Retained Earnings

    Balance at beginning of period        $15,345            $14,860
    Cumulative effect adjustment (1)            -                 (8)
    Net earnings                            2,033              2,401
    Cash dividends                           (366)              (312)
    Share repurchases                           -             (1,660)
    Balance at end of period              $17,012            $15,281


    (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)
                                           October 31, November 2, February 1,
                                              2008        2007       2008
    Assets

     Current assets:
       Cash and cash equivalents              $322        $336       $281
       Short-term investments (includes
        $33 million of trading securities
        at October 31, 2008)                   445         231        249
       Merchandise inventory - net           8,327       7,775      7,611
       Deferred income taxes - net             230         241        247
       Other current assets                    197         193        298

       Total current assets                  9,521       8,776      8,686

       Property, less accumulated
        depreciation                        22,602      20,755     21,361
       Long-term investments                   466         333        509
       Other assets                            440         325        313

       Total assets                        $33,029     $30,189    $30,869

    Liabilities and shareholders' equity

     Current liabilities:
       Short-term borrowings                  $249         $16     $1,064
       Current maturities of long-term
        debt                                    34          35         40
       Accounts payable                      4,831       3,895      3,713
       Accrued compensation and employee
        benefits                               516         512        467
       Self-insurance liabilities              723         653        671
       Deferred revenue                        748         793        717
       Other current liabilities             1,330       1,288      1,079

       Total current liabilities             8,431       7,192      7,751

       Long-term debt, excluding current
        maturities                           5,044       5,580      5,576
       Deferred income taxes - net             751         615        670
       Other liabilities                       846         748        774

       Total liabilities                    15,072      14,135     14,771

    Shareholders' equity:
       Preferred stock - $5 par value,
        none issued                              -           -          -
       Common stock - $.50 par value;
       Shares issued and outstanding
          October 31, 2008           1,467
          November 2, 2007           1,470
          February 1, 2008           1,458     734         735        729
       Capital in excess of par value          215          20         16
       Retained earnings                    17,012      15,281     15,345
       Accumulated other comprehensive
        (loss) income                           (4)         18          8

       Total shareholders' equity           17,957      16,054     16,098

       Total liabilities and
        shareholders' equity               $33,029     $30,189    $30,869



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

                                                      Nine Months Ended
                                            October 31, 2008  November 2, 2007

    Cash flows from operating activities:
       Net earnings                                 $2,033            $2,401
          Adjustments to reconcile net earnings
           to net cash provided by operating
           activities:
          Depreciation and amortization              1,232             1,069
          Deferred income taxes                         99               (42)
          Loss on property and other assets             48                33
          Loss on redemption of long-term debt           8                 -
          Share-based payment expense                   79                69
          Changes in operating assets and
           liabilities:
             Merchandise inventory - net              (725)             (630)
             Other operating assets                     77                43
             Accounts payable                        1,124               368
             Other operating liabilities               383               474
       Net cash provided by operating activities     4,358             3,785

    Cash flows from investing activities:
       Purchases of short-term investments            (179)             (592)
       Proceeds from sale/maturity of short-term
        investments                                    265               853
       Purchases of long-term investments           (1,097)           (1,286)
       Proceeds from sale/maturity of long-term
        investments                                    837             1,057
       Increase in other long-term assets              (53)              (20)
       Property acquired                            (2,539)           (2,912)
       Proceeds from sale of property and other
        long-term assets                                26                51
       Net cash used in investing activities        (2,740)           (2,849)

    Cash flows from financing activities:
       Net decrease in short-term borrowings          (786)               (9)
       Proceeds from issuance of long-term debt         13             1,294
       Repayment of long-term debt                    (564)              (89)
       Proceeds from issuance of common stock
        under employee stock purchase plan              39                40
       Proceeds from issuance of common stock
        from stock options exercised                    94                58
       Cash dividend payments                         (366)             (312)
       Repurchase of common stock                       (8)           (1,950)
       Excess tax benefits of share-based
        payments                                         1                 4
       Net cash used in financing activities        (1,577)             (964)

    Net increase (decrease) in cash and cash
     equivalents                                        41               (28)
    Cash and cash equivalents, beginning of period     281               364
    Cash and cash equivalents, end of period          $322              $336

SOURCE  Lowe's Companies, Inc.
    -0-                             11/17/2008
    /CONTACT:  Shareholders & Analysts, Robbin Moore-Randolph,
+1-704-758-3579, or Media, Chris Ahearn, +1-704-758-2304/
    /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

TP-CT
-- CLM019C --
9267 11/17/2008 07:00 EST http://www.prnewswire.com