Print Page  |  Close Window

News Release

Lowe's Reports Record Earnings for First Quarter

First Quarter Net Earnings Increased 54 Percent

First Quarter Comparable Store Sales Increased 7.5 Percent

WILKESBORO, N.C., May 20 / -- Lowe's Companies, Inc. (NYSE: LOW), the world's second largest home improvement retailer, today reported net earnings of $345.8 million for the quarter ended May 3, 2002, a 53.5 percent increase over the same period a year ago. Diluted earnings per share increased 51.7 percent to $0.44 from $0.29 in the first quarter of 2001. 

Sales for the quarter increased 22.6 percent to $6.47 billion, up from $5.28 billion in the first quarter of 2001. Comparable store sales for the first quarter increased 7.5 percent.

"During the first quarter, we continued to experience favorable business trends similar to those realized in the fourth quarter of last year," commented Robert L. Tillman, Lowe's chairman and CEO. "Our customers continued to demonstrate an eagerness to maintain, decorate and improve their homes even against a backdrop of mixed economic data. Our increased national presence, our ability to leverage national advertising and our continued focus on becoming the consumers' first choice for home improvement has paved the way for expansion into new markets while increasing traffic in existing stores." 

During the quarter, Lowe's opened 46 new stores including 4 relocations. One older, smaller store was closed. As of May 3, 2002, Lowe's operated 785 stores in 42 states representing 86.0 million square feet of retail selling space, a 19.7 percent increase over last year.

A conference call to discuss first quarter 2002 operating results is scheduled for today (Monday, May 20) at 9:00 a.m. EDT. Please dial 719-457-2633 (confirmation code 780920) to participate. A webcast of the call will take place simultaneously and can be accessed by visiting Lowe's website at www.lowes.com and clicking on About Lowe's, Investor Information, Shareholder Services, Calendar of Events. A replay of the call will be archived on www.lowes.com for 7 days. 

Lowe's Business Outlook

This outlook is based on current expectations and includes "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. 

Second Quarter 2002 (comparisons to second quarter 2001)

  • The company expects to open approximately 23 stores
  • Total sales are expected to increase approximately 21 to 22 percent
  • The company expects to report a comparable store sales increase of 4 to 6 percent
  • Gross margin improvement of 50 to 60 basis points is expected
  • The company expects flat to slight leverage in SG&A expenses as a percent of sales
  • Store opening costs are expected to be approximately $32 million
  • The company expects slight leverage in total expenses
  • Diluted earnings per share of $0.53 to $0.54 are expected
  • Lowe's second quarter ends on August 2, 2002 with operating results to be publicly released on Monday, August 19, 2002

Fiscal Year 2002 (comparisons to fiscal year 2001)

  • The company expects to open 123 stores in 2002 reflecting total square footage growth of approximately 18 percent
  • Total sales are expected to increase approximately 19 to 20 percent for the year
  • The company expects to report a comparable store sales increase of approximately 5 percent
  • Gross margin is expected to improve 50 to 60 basis points
  • Earnings before taxes as a percent of sales are expected to increase by 65 to 75 basis points
  • Diluted earnings per share of $1.66 to $1.69 are expected for the fiscal year ending January 31, 2003

This news release includes "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, the direction of general economic conditions, the availability of real estate for expansion and its successful development, particularly in major metropolitan markets, the availability of sufficient labor to facilitate growth, fluctuations in prices and availability of product, unanticipated impact of competition, legal or regulatory developments, and weather conditions that affect sales.

Lowe's Companies, Inc. is the world's second largest home improvement retailer. Headquartered in Wilkesboro, N.C., Lowe's is the 13th largest retailer in the U.S. as well as the 30th largest retailer worldwide. With over 100,000 employees, Lowe's is Improving Home Improvement for over seven million do-it-yourself retail and commercial business customers each week. For more information, visit lowes.com. 

Lowe's Companies, Inc.
     Consolidated Statements of Current and Retained Earnings (Unaudited)
     In Thousands, Except Per Share Data
 
                                                  Three Months Ended
                                           May 3, 2002         May 4, 2001
     Current Earnings                     Amount   Percent      Amount Percent
 
     Net sales                          $6,470,597  100.00  $5,276,365  100.00
 
     Cost of sales                       4,547,875   70.29   3,782,836   71.69
 
     Gross margin                        1,922,722   29.71   1,493,529   28.31
 
     Expenses:
 
     Selling, general and
      administrative                     1,141,096   17.64     939,745   17.81
 
     Store opening costs                    36,916    0.57      35,792    0.68
 
     Depreciation                          145,305    2.24     119,078    2.26
 
     Interest                               46,991    0.73      41,326    0.78
 
     Total expenses                      1,370,308   21.18   1,135,941   21.53
 
     Pre-tax earnings                      552,414    8.53     357,588    6.78
 
     Income tax provision                  206,603    3.19     132,308    2.51
 
     Net earnings                         $345,811    5.34    $225,280    4.27
 
 
     Shares outstanding - Basic            776,513             768,418
 
     Basic earnings per share                $0.45               $0.29
 
     Shares outstanding - Diluted          798,092             787,510
 
     Diluted earnings per share              $0.44               $0.29
 
 
     Retained Earnings
     Balance at beginning of period     $4,481,734          $3,518,356
     Net earnings                          345,811             225,280
     Cash dividends                        (15,544)            (13,462)
     Balance at end of period           $4,812,001          $3,730,174
 
 
     Lowe's Companies, Inc.
     Consolidated Balance Sheets
     In Thousands
 
                                          (Unaudited)  (Unaudited)
                                             May 3,       May 4,    February 1,
                                              2002         2001         2002
     Assets
 
          Current assets:
          Cash and cash equivalents       $1,475,579     $999,953     $798,839
          Short-term investments              48,271       38,173       54,389
          Accounts receivable - net          192,567      196,529      165,578
          Merchandise inventory            4,360,056    3,917,667    3,610,776
          Deferred income taxes               97,543       95,006       92,504
          Other assets                       267,078      197,532      198,306
 
          Total current assets             6,441,094    5,444,860    4,920,392
 
          Property, less accumulated
           depreciation                    8,991,813    7,421,342    8,653,439
          Long-term investments               19,170       32,141       21,660
          Other assets                       158,463      123,405      140,728
 
          Total assets                   $15,610,540  $13,021,748  $13,736,219
 
     Liabilities and Shareholders'
      Equity
 
          Current liabilities:
          Short-term borrowings             $100,000     $100,000     $100,000
          Current maturities of long-
           term debt                          59,790       37,635       59,259
          Accounts payable                 2,740,446    2,449,287    1,714,776
          Employee retirement plans          136,171       88,920      126,339
          Accrued salaries and wages         175,326      179,594      220,885
          Other current liabilities        1,285,763      841,854      795,571
 
          Total current liabilities        4,497,496    3,697,290    3,016,830
 
          Long-term debt, excluding
           current maturities              3,735,651    3,291,823    3,734,011
          Deferred income taxes              313,567      261,580      304,697
          Other long-term liabilities          6,734        3,193        6,239
 
          Total liabilities                8,553,448    7,253,886    7,061,777
 
          Shareholders' equity:
          Preferred stock - $5 par      1
           value, none issued                     --           --           --
          Common stock - $.50 par value;
           Shares Issued and Outstanding
            May 3, 2002        777,301
            May 4, 2001        769,744
            February 1, 2002   775,714       388,650      384,872      387,857
          Capital in excess of par         1,855,904    1,654,004    1,804,161
          Retained earnings                4,812,001    3,730,174    4,481,734
          Unearned compensation-
           restricted stock awards                --       (1,666)          --
          Accumulated other
           comprehensive income                  537          478          690
 
          Total shareholders' equity       7,057,092    5,767,862    6,674,442
 
          Total liabilities and
           shareholders' equity          $15,610,540  $13,021,748  $13,736,219
 
 
     Lowe's Companies, Inc.
     Consolidated Statements of Cash Flows (Unaudited)
     In Thousands
 
                                                  For the Three Months Ended
                                                    May 3,            May 4,
                                                     2002              2001
     Cash Flows From Operating Activities:
          Net Earnings                              $345,811         $225,280
          Adjustments to Reconcile Net Earnings to
           Net Cash Provided By Operating
            Activities:
              Depreciation and Amortization          149,929          119,495
              Deferred Income Taxes                    3,920           (3,845)
              Loss on Disposition/Writedown of
               Fixed and Other Assets                  9,000           13,614
              Tax Effect of Stock Options Exercised    6,269           15,463
              Changes in Operating Assets
               and Liabilities:
                Accounts Receivable - Net            (26,989)         (35,544)
                Merchandise Inventory               (749,280)        (632,297)
                Other Operating Assets               (68,764)         (36,034)
                Accounts Payable                   1,025,670          734,917
                Employee Retirement Plans             32,554           29,122
                Other Operating Liabilities          445,128          193,065
          Net Cash Provided by Operating
           Activities                              1,173,248          623,236
 
     Cash Flows from Investing Activities:
          Decrease (Increase) in
           Investment Assets:
             Short-Term Investments                   10,441          (21,723)
             Purchases of Long-Term Investments       (2,068)            (990)
          Increase in Other Long-Term Assets          (8,998)          (6,686)
          Fixed Assets Acquired                     (501,193)        (511,842)
          Proceeds from the Sale of Fixed
           and Other Long-Term Assets                  4,024            7,140
          Net Cash Used in Investing Activities     (497,794)        (534,101)
 
     Cash Flows from Financing Activities:
          Net (Decrease) in Short-Term Borrowings         --         (149,829)
          Long-Term Debt Borrowings                       --          601,066
          Repayment of Long-Term Debt                 (6,707)         (12,034)
          Proceeds from Stock Options Exercised       23,537           29,419
          Cash Dividend Payments                     (15,544)         (13,462)
          Net Cash Provided by Financing Activities    1,286          455,160
 
     Net Increase in Cash and Cash Equivalents       676,740          544,295
     Cash and Cash Equivalents, Beginning of Period  798,839          455,658
     Cash and Cash Equivalents, End of Period     $1,475,579         $999,953