Company Reiterates Guidance for Fiscal 2009 Provides Outlook for 2010 and BeyondCHARLOTTE, N.C., Sep 22, 2009 (BUSINESS WIRE) -- Lowe's Companies, Inc. (NYSE: LOW) will discuss its current strategies
for managing the business in today's challenging environment and
longer-term opportunities to drive performance when the company meets
with analysts and investors today in Charlotte at its annual conference.
Today, Lowe's reiterated its prior sales and earnings guidance for the
2009 fiscal year, which was provided in its August 17, 2009 earnings
release. Sales and earnings guidance can be found in the Business
Outlook section of this release.
"Although the economic environment remains challenging, we continue to
invest in our business and drive operating efficiencies to become a more
efficient company and better serve the needs of home improvement
customers," commented Robert A. Niblock, Lowe's chairman and CEO. "Over
the past three years, we have worked to strike the right balance between
controlling expenses and appropriately staffing stores to maintain great
customer service. Our focus on achieving this balance enabled us to
maintain profitability and positioned the company for continued success.
"Although prices have declined in recent years, the home remains many
consumers' largest asset. What has changed is their approach to tackling
home improvement projects. Consumers are shifting to more do-it-yourself
projects as they balance convenience with the cost of outsourcing.
Opportunity rests in our ability to understand consumers' evolving needs
and provide products and customer-valued solutions," Niblock concluded.
During the conference, Lowe's executives will focus on key initiatives
to capitalize on market growth and changing competitive dynamics, drive
efficiencies, enhance customer service and increase market share.
Highlights of those presentations include:
Gregory M. Bridgeford, executive vice president of business
development: "Lowe's is well positioned to gain market share in
this highly fragmented industry. Although the path to recovery will
vary from market to market, our industry is expected to grow next
year. Our growth will be fueled by prudent store expansion into
underserved markets as well as the exploration of international
opportunities that allow us to capitalize on our strengths."
Larry D. Stone, president and chief operating officer: "Using
our Building Blocks for Success as a foundation, we are taking
advantage of opportunities to drive efficiencies in all aspects of our
business, while continuing to deliver our commitment to customer
service. Additionally, we are implementing cross functional
initiatives that position Lowe's to profitably grow market share and
meet the evolving needs of home improvement consumers."
Robert F. Hull, Jr., executive vice president and CFO: "Looking
past the current cycle, we expect sales growth driven by market share
gains, which leads to improved profitability, strong cash flow and
significant amounts of capital returned to shareholders."
Lowe's also told investors it has decided to close one store that it
deemed not economically viable.
"The decision to close a store is difficult as it affects people and the
communities we serve," said Niblock. "The store in central Milwaukee has
struggled since it opened in 2005 and sales have not improved over time."
The company continues to evaluate the cash flow performance of existing
stores. Although there were no operating store impairment charges for
the first half of the current fiscal year, the continuing uncertainty
regarding the timing and strength of the economic recovery makes it
possible the company will recognize impairments related to operating
stores during the second half of fiscal year 2009. While impairments for
operating stores are not certain, to the extent necessary, and to
provide an order of magnitude, the total is not expected to exceed $100
million. Due to the uncertainty of possible impairments, the company has
not adjusted its earnings guidance for the 2009 fiscal year.
Lowe's Business Outlook
Fiscal Year 2009 (comparisons to fiscal year 2008)
The company expects to open 62 to 66 stores in 2009 reflecting total
square footage growth of approximately 4 percent
Total sales are expected to decline approximately 3 percent
The company expects comparable store sales to decline 7 to 9 percent
Earnings before interest and taxes as a percentage of sales (operating
margin) is expected to decline approximately 130 basis points
Store opening costs are expected to be approximately $50 million
Diluted earnings per share of $1.13 to $1.21 are expected for the
fiscal year ending January 29, 2010
Fiscal Year 2010 (comparisons to fiscal year 2009)
The company expects to open 35 to 45 stores in 2010 reflecting total
square footage growth of approximately 2 to 2.5 percent
Total sales are expected to increase approximately 3 to 4 percent
The company expects comparable store sales to increase approximately 1
Earnings before interest and taxes as a percentage of sales (operating
margin) is expected to increase approximately 30 basis points
Store opening costs are expected to be approximately $30 million
Diluted earnings per share of $1.24 to $1.34 are expected for the
fiscal year ending January 28, 2011
A webcast of this conference is scheduled for today (Tuesday, September
22) at 10:00 am EDT. The webcast can be accessed by visiting Lowe's
website at www.Lowes.com/investor
and clicking on Lowe's 2009 Analyst & Investor Conference Webcast. A
replay of the webcast will be available online shortly following the
event and available until September 2010.
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 and increasing regulation 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 legislative 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 2008 sales of $48.2 billion, Lowe's Companies, Inc. is
a FORTUNE(R) 50 company that serves approximately 14 million customers a
week at more than 1,675 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.
SOURCE: Lowe's Companies, Inc.
For Lowe's Companies, Inc.
Robbin Moore-Randolph, 704-758-3579
Chris Ahearn, 704-758-2304