MOORESVILLE, N.C., Dec. 7, 2016 /PRNewswire/ -- Lowe's Companies, Inc. (NYSE: LOW) meets today with analysts and investors in Mooresville, North Carolina to discuss its strategic priorities and long-term financial targets.
Lowe's Enterprise Objectives
"We're focused on evolving our business to further drive trust and loyalty by empowering customers throughout their project journey. Our customers take great pride in their homes and we are equally proud to be the first stop for their home improvement projects," commented Robert A. Niblock, Lowe's chairman, president and CEO. "We're building on our past success and adapting to meet the needs of a changing customer."
Today's presentations will include the company's plans to:
- Expand home improvement reach to drive profitable share gains
- Further adapt to the customer, developing capabilities to anticipate and support their needs
- Generate long-term profitable growth and substantial returns for shareholders
"We continue to generate solid cash flow and deliver substantial returns for our shareholders," commented Robert F. Hull, Jr., Lowe's CFO. "Return on Invested Capital is expected to exceed 22 percent by 2019, an increase of more than 500 basis points over the next three years."
Today, Lowe's also reiterates its prior sales and earnings guidance for the 2016 fiscal year, which was provided in its Nov. 16, 2016 earnings release.
"We are pleased with our performance quarter-to-date, including the holiday season, and remain confident in our Business Outlook," Hull added.
Lowe's Business Outlook
Fiscal Year 2016 -- a 53-week Year (comparisons to fiscal year 2015 -- a 52-week year; based on U.S. GAAP)
- Total sales are expected to increase 9 to 10 percent, including the 53rd week
- The 53rd week is expected to increase total sales by approximately 1.5 percent
- Comparable sales are expected to increase 3 to 4 percent
- The company expects to add approximately 40 home improvement and hardware stores.
- Earnings before interest and taxes as a percentage of sales (operating margin) are expected to increase approximately 65 basis points.1
- The effective income tax rate is expected to be approximately 40.1%.
- Diluted earnings per share of approximately $3.521 are expected for the fiscal year ending February 3, 2017.
1 Includes the net gain on the settlement of the foreign currency hedge entered into in advance of the company's acquisition of RONA(1Q 2016 and 2Q 2016) and the impact of non-cash charges associated with the joint venture with Woolworths in Australia (4Q 2015 and 3Q2016), the project write-offs that were a part of the ongoing review of the company's strategic initiatives (3Q2016), and the goodwill and long-lived asset impairment charges associated with the company's Orchard Supply Hardware operations (3Q2016).
A webcast of this conference is scheduled for today (Wednesday, Dec. 7) at 10:00 am ET. The webcast can be accessed by visiting Lowe's website at www.Lowes.com/investor, clicking on Webcasts and then on Lowe's 2016 Analyst & Investor Conference Webcast. A replay of the webcast will be archived on Lowes.com/investor until the next Analyst and Investor Conference.
Cautionary Note Regarding Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements including words such as "believe", "expect", "anticipate", "plan", "desire", "project", "estimate", "intend", "will", "should", "could", "would", "may", "strategy", "potential", "opportunity" and similar expressions are forward-looking statements. Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. Forward-looking statements include, but are not limited to, statements about future financial and operating results, Lowe's plans, objectives, business outlook, expectations and intentions, expectations for sales growth, comparable sales, earnings and performance, shareholder value, capital expenditures, cash flows, the housing market, the home improvement industry, demand for services, share repurchases, Lowe's strategic initiatives, including those regarding the acquisition by Lowe's Companies, Inc. of RONA, inc. and the expected impact of the transaction on Lowe's strategic and operational plans and financial results, and any statement of an assumption underlying any of the foregoing and other statements that are not historical facts. Although we believe that the expectations, opinions, projections and comments reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and we can give no assurance that such statements will prove to be correct. Actual results may differ materially from those expressed or implied in such statements.
A wide variety of potential risks, uncertainties and other factors could materially affect our ability to achieve the results either expressed or implied by these forward-looking statements including, but not limited to, changes in general economic conditions, such as the rate of unemployment, interest rate and currency fluctuations, fuel and other energy costs, slower growth in personal income, changes in consumer spending, changes in the rate of housing turnover, the availability of consumer credit and of mortgage financing, inflation or deflation of commodity prices, and other factors that can negatively affect our customers, as well as our ability to: (i) respond to adverse trends in the housing industry, such as a demographic shift from single family to multi-family housing, a reduced rate of growth in household formation, and slower rates of growth in housing renovation and repair activity, as well as uneven recovery in commercial building activity; (ii) secure, develop, and otherwise implement new technologies and processes necessary to realize the benefits of our strategic initiatives focused on omni-channel sales and marketing presence and enhance our efficiency; (iii) attract, train, and retain highly-qualified associates; (iv) manage our business effectively as we adapt our traditional operating model to meet the changing expectations of our customers; (v) maintain, improve, upgrade and protect our critical information systems from data security breaches and other cyber threats; (vi) respond to fluctuations in the prices and availability of services, supplies, and products; (vii) respond to the growth and impact of competition; (viii) address changes in existing or new laws or regulations that affect consumer credit, employment/labor, trade, product safety, transportation/logistics, energy costs, health care, tax or environmental issues; (ix) positively and effectively manage our public image and reputation and respond appropriately to unanticipated failures to maintain a high level of product and service quality that could result in a negative impact on customer confidence and adversely affect sales; and (x) effectively manage our relationships with selected suppliers of brand name products and key vendors and service providers, including third party installers. In addition, we could experience impairment losses if either the actual results of our operating stores are not consistent with the assumptions and judgments we have made in estimating future cash flows and determining asset fair values, or we are required to reduce the carrying amount of our investment in certain unconsolidated entities that are accounted for under the equity method. With respect to the acquisition of RONA inc., potential risks include the effect of the transaction on Lowe's and RONA's strategic relationships, operating results and businesses generally; our ability to integrate personnel, labor models, financial, IT and others systems successfully; disruption of our ongoing business and distraction of management; hiring additional management and other critical personnel; increasing the scope geographic diversity and complexity of our operations; significant transaction costs or unknown liabilities; and failure to realize the expected benefits of the transaction. For more information about these and other risks and uncertainties that we are exposed to, you should read the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates" included in our most recent Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the "SEC") and the description of material changes thereto, if any, included in our Quarterly Reports on Form 10-Q or subsequent filings with the SEC.
The forward-looking statements contained in this news release are expressly qualified in their entirety by the foregoing cautionary statements. The foregoing list of important factors that may affect future results is not exhaustive. When relying on forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. All such forward-looking statements are based upon data available as of the date of this release or other specified date and speak only as of such date. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf about any of the matters covered in this release are qualified by these cautionary statements and in the "Risk Factors" included in our most recent Annual Report on Form 10-K and the description of material changes thereto, if any, included in our Quarterly Reports on Form 10-Q or subsequent filings with the SEC. We expressly disclaim any obligation to update or revise any forward-looking statement, whether as a result of new information, change in circumstances, future events or otherwise, except as may be required by law.
Lowe's Companies, Inc.
Lowe's Companies, Inc. (NYSE: LOW) is a FORTUNE® 50 home improvement company serving more than 17 million customers a week in the United States, Canada and Mexico. With fiscal year 2015 sales of $59.1 billion, Lowe's and its related businesses operate or service more than 2,355 home improvement and hardware stores and employ over 285,000 employees. Founded in 1946 and based in Mooresville, N.C., Lowe's supports the communities it serves through programs that focus on K-12 public education and community improvement projects. For more information, visit Lowes.com.
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