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News Release

Lowe's Companies, Inc. Reports 32% Increase in Third Quarter Earnings Per Share

NORTH WILKESBORO, N.C., Nov. 16 -- Lowe's Companies, Inc. (NYSE: LOW) announced today that diluted earnings per share for the quarter ended October 30, 1998 grew 32% to $0.33, compared to diluted earnings per share of $0.25 in the third quarter of 1997. Net earnings for the quarter grew 32% to $116.4 million compared to net earnings of $88.1 million in the third quarter of 1997. The Company recorded an $8.1 million LIFO credit in the quarter. On a FIFO basis, net earnings grew 26% compared to last year's third quarter.

As previously reported, sales for the quarter ended October 30, 1998 totaled $3.00 billion, compared to last year's sales of $2.53 billion, an increase of 18.6%. Comparable store sales increased 4.4% in the quarter. Large stores (those larger than 80,000 square feet) had a comparable store sales increase of 5.0% in the quarter.

"The discipline and focus of our 65,000+ employee-owners has enabled Lowe's to achieve outstanding third quarter earnings growth despite below plan sales results," commented Robert L. Tillman, Lowe's Chairman and Chief Executive Officer. "Warmer, drier weather over most of our trade area delayed our fall lawn and garden businesses until late in the quarter. However, strong performance throughout the quarter from core categories such as home decor, fashion lighting, and hardware helped overcome the weakness experienced in weather sensitive categories."

In the third quarter, Lowe's opened 16 stores (10 new stores and 6 relocations). Three Contractor Yards were also opened bringing total store count to 465 stores in 26 states. Retail square footage grew to 40.2 million, a 19.3% increase over third quarter 1997.

This news release may include "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Although the Company believes that comments reflected in such forward- looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Possible risks and uncertainties regarding these statements include, but are not limited to, general economic trends, availability and development of real estate for expansion, fluctuation in prices in commodities, the nature of competition and weather conditions, all of which are described in greater detail in Lowe's 1997 Annual Report.

Supplemental Information: 
STORE PERFORMANCE PERSPECTIVE

In 1992, Lowe's began a more detailed reporting on the transformation from a chain of small, contractor-oriented stores to a family of modern, home- improvement warehouses. In third quarter 1998, the Large stores contributed 80% of sales and 77% of operating profits. The following tables are intended to assist the user in understanding the impact of that transformation.

Store Group Categories, presented in these tables, are defined as follows:

    1. Yards : Focused Contractor Yards 
    2. Small : Average of 19,000 square feet 
    3. Medium : Average of 57,000 square feet 
    4. Large : Average of more than 100,000 square feet.

All stores in excess of 80,000 square feet.

Further, Large store sales are reported on both a comparable (same-store) basis and new (open less than a year) basis. A relocated store is removed from the comparable store computation until it has been open at least 12 months.

    Third Quarter 1998
    Table 1:  Store Group Unit Totals, End of Third Quarter
                               1998                1997               1996
                           % of                  % of              % of
                           Total      Units     Total    Units    Total  Units
     Yards                   7%         32        7%       30       6%     25
     Small                   8%         39       12%       53      17%     67
     Medium                 14%         65       19%       82      25%     95
     Large Comp             52%        240       45%      187      33%    129

     Large New              19%         89       17%       73      19%     75

     Total                 100%        465      100%      425     100%    391


    Table 2:  Sales & Operating Profits* by Store Group, Third Quarter
                                1998               1997              1996

                           Sales     O.P.*     Sales     O.P.*    Sales  O.P.*
    Yards                    4%       3%         4%        3%      4%      3%

    Small                    4%       4%         6%        7%     10%     11%

    Medium                  12%      16%        19%       26%     25%     34%

    Large Comp              59%      63%        52%       54%     43%     46%

    Large New               21%      14%        19%       10%     18%      6%

    Total                  100%     100%       100%      100%    100%    100%

*Operating Profits before corporate expense and intercompany charges, interest, LIFO and income taxes.

Lowe's Companies, Inc. is the second largest retailer of home improvement products in the world with specific emphasis on do-it-yourself retail and commercial business customers. Lowe's was recently ranked in Fortune magazine's inaugural list of "The 100 Best Companies to Work For in America" and currently employs more than 65,000 people.

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

                                           Quarter Ended
                              October 30, 1998          October 31, 1997
    Current Earnings          Amount     Percent         Amount     Percent

    Net sales               $ 3,003,993   100.00    $  2,530,481   100.00

    Cost of sales             2,191,674    72.96       1,859,595    73.49

    Gross margin                812,319    27.04         670,886    26.51

    Expenses:

    Selling, general and
     administrative             522,723    17.40         435,765    17.22

    Store opening costs          20,345     0.68          22,671     0.90

    Depreciation                 68,660     2.29          60,546     2.39

    Interest                     18,024     0.60          15,046     0.59

    Total expenses              629,752    20.97         534,028    21.10

    Pre-tax earnings            182,567     6.07         136,858     5.41

    Income tax provision         66,200     2.20          48,759     1.93

    Net earnings          $     116,367     3.87   $      88,099     3.48

    Shares outstanding
      (weighted average)        352,627                  349,389

    Basic Earnings Per
     Share                    $    0.33                  $  0.25

    Diluted Earnings Per
     Share                    $    0.33                  $  0.25

    Retained Earnings
    Balance at beginning
     of period             $  1,804,856             $  1,423,699
    Net earnings                116,367                   88,099
    Cash dividends              (10,524)                  (9,586)
    Balance at end of
     period                $  1,910,699             $  1,502,212


                                         Nine Months Ended
                                  October 30, 1998      October 31, 1997
    Current Earnings             Amount     Percent         Amount     Percent

    Net sales              $  9,329,218    100.00     $  7,739,321  100.00

    Cost of sales             6,853,825     73.47        5,713,639   73.83

    Gross margin              2,475,393     26.53        2,025,682   26.17

    Expenses:

    Selling, general and
     administrative           1,583,962     16.98        1,314,550   16.98

    Store opening costs          46,663      0.50           43,211    0.56

    Depreciation                199,665      2.14          175,827    2.27

    Interest                     54,934      0.59           48,336    0.63

    Total expenses            1,885,224     20.21        1,581,924   20.44

    Pre-tax earnings            590,169      6.32          443,758    5.73

    Income tax provision        213,959      2.29          158,781    2.05

    Net earnings            $   376,210      4.03    $     284,977    3.68

    Shares outstanding
     (weighted average)         351,884                    348,134

    Basic Earnings Per Share   $   1.07                 $     0.82

    Diluted Earnings Per Share $   1.06                 $     0.82

    Retained Earnings
    Balance at beginning
     of period             $  1,565,133               $  1,245,888
    Net earnings                376,210                    284,977
    Cash dividends              (30,644)                   (28,653)
    Balance at end of
      period               $  1,910,699               $  1,502,212


    Lowe's Companies, Inc.
    Consolidated Balance Sheets
    (Unaudited)
    In Thousands

                              October 30,      October 31,      January 30,
                                 1998             1997             1998
    Assets

     Current assets:
     Cash and cash
       equivalents     $     317,032     $       28,539      $    195,146
     Short-term investments   36,190             81,682            16,155
     Accounts receivable -
      net                    159,877            144,635           118,408
     Merchandise inventory 2,203,168          1,907,188         1,714,592
     Deferred income taxes    41,228             24,337            34,116
     Other assets             68,749             40,702            31,185

     Total current assets  2,826,244          2,227,083         2,109,602

     Property, less accumulated
      depreciation         3,437,723          2,867,989         3,005,199
     Long-term investments    34,065             34,758            35,161
     Other assets             75,677             43,622            69,315

     Total assets       $  6,373,709        $ 5,173,452       $ 5,219,277

    Liabilities and Shareholders' Equity

     Current liabilities:
     Short-term
      borrowings        $     93,975        $    84,866       $     98,104
     Current maturities of
      long-term debt          57,833             12,240             12,478
     Accounts payable      1,267,425            990,735            969,777
     Employee retirement
      plans                   54,960             49,486             64,669
     Accrued salaries
      and wages              119,510             97,209             83,377
     Other current
      liabilities            319,485            243,014            220,915

     Total current
      liabilities          1,913,188          1,477,550          1,449,320

     Long-term debt, excluding
      current maturities   1,302,343          1,049,898          1,045,570
     Deferred income taxes   130,001            110,205            123,778

     Total liabilities     3,345,532          2,637,653          2,618,668

     Shareholders' equity
     Preferred stock - $5 par
      value, none issued           -                  -                  -
     Common stock - $.50 par value;
     Issued and Outstanding
      October 30, 1998  352,679
      October 31, 1997  349,804
      January 30, 1998  350,632
                             176,339            174,902            175,316
     Capital in excess
      of par                 975,865            872,098            892,666
     Retained earnings     1,910,699          1,502,212          1,565,133
     Unearned compensation-
      restricted stock
      awards                 (35,083)           (13,480)           (32,694)
     Accumulated other
      comprehensive income - unrealized
      gain on available-for-sale
      securities                 357                 67                188

     Total shareholders'
      equity               3,028,177          2,535,799          2,600,609

     Total liabilities and
      shareholders'
      equity            $  6,373,709        $ 5,173,452        $ 5,219,277

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

                                             For the Nine Months Ended
                                     October 30,  October 31,    January 31,
                                        1998         1997          1997
    Cash Flows From Operating Activities:
     Net Earnings                   $  376,210    $  284,977    $  292,150
     Adjustments to Reconcile Net Earnings to Net Cash
       Provided By Operating Activities:
         Depreciation                  199,665       175,827       198,115
         Amortization of Original
           Issue Discount                  330           112         1,671
         Increase (Decrease) in
          Deferred Income Taxes           (997)       12,862        35,038
         Loss on Disposition/Writedown
          of Fixed and Other Assets     16,163        15,186        (1,156)
         Changes in Operating Assets and Liabilities:
           Accounts Receivable - Net   (41,469)      (27,073)        9,665
           Merchandise Inventory        (488,576)   (301,308)     (190,748)
           Other Operating Assets         (37,407)   (11,814)       (4,605)
           Accounts Payable               297,648     76,568       150,956
           Employee Retirement Plans       50,449     45,352        10,616
           Other Operating Liabilities    157,745     74,910        36,404
     Net Cash Provided by
      Operating Activities                529,761    345,599       539,002

    Cash Flows from Investing Activities:
     Net Increase in
      Short-Term Investments               (2,774)   (39,956)      (23,601)
     Purchases of Long-Term Investments   (16,489)   (12,311)       (7,636)
     Proceeds from Sale/Maturity
      of Long-Term Investments                602      2,172        10,548
     Decrease in Other Long-Term Assets   (12,191)    (2,197)       16,168
     Fixed Assets Acquired               (643,335)  (538,235)     (144,121)
     Proceeds from the Sale of Fixed
      and Other Long-Term Assets           18,429     18,986         3,825
     Net Cash Used in
      Investing Activities               (655,758)  (571,541)     (144,817)

    Cash Flows from Financing Activities:
     Long-Term Debt Borrowings            296,159    265,743            --
     Net Increase (Decrease)
      in Short-Term Borrowings             (4,129)     3,961        43,344
     Proceeds from Stock
      Options Exercised                     8,219        145            --
     Repayment of Long-Term Debt          (12,136)   (27,102)      152,111
     Cash Dividend Payments               (40,230)   (28,653)       (8,047)
     Net Cash Provided by
      Financing Activities                247,883    214,094      (128,406)

    Net Increase (Decrease) in Cash
     and Cash Equivalents                 121,886    (11,848)      265,779
    Cash and Cash Equivalents,
     Beginning of Year                    195,146     40,387       141,533
    Cash and Cash Equivalents,
     End of Period                     $  317,032   $ 28,539    $  407,312