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News Release

Lowe's Reports Record Earnings for Second Quarter
              Second Quarter Net Earnings Increased 27.8 Percent

              Second Quarter Total Sales Increased 17.2 Percent

WILKESBORO, N.C., Aug. 18 /PRNewswire-FirstCall/ -- Lowe's Companies, Inc. (NYSE: LOW), the world's second largest home improvement retailer, today reported net earnings of $597 million for the quarter ended August 1, 2003, a 27.8 percent increase over the same period a year ago. Diluted earnings per share increased 27.1 percent to $0.75 from $0.59 in the second quarter of 2002.

(Logo: http://www.newscom.com/cgi-bin/prnh/20000720/LOWES )

Sales for the quarter increased 17.2 percent to $8.77 billion, up from $7.49 billion in the second quarter of 2002. Comparable store sales for the second quarter increased 6.9 percent.

"As we had expected, Americans' passion for home improvement projects surged as the weather improved across most of the U.S.," said Robert L. Tillman, Lowe's chairman and CEO. "As a result of the continuing commitment to improve the home, we experienced sales strength in every product category, including big ticket items, and in every region of the country. The continuing success of our internal sales and performance initiatives, as well as signs of an improving macro economic climate, keep us optimistic for the back half of the year."

"A strategic investment in inventory and an effective marketing program allowed Lowe's to capitalize on a compressed spring selling season," added Lowe's President Robert A. Niblock. "When customers returned to our stores following the cold and wet months that started the year, our employees delivered great service and the merchandise our customers wanted. With over 57 years of experience in the home improvement industry, our second quarter results show that our stores were prepared for what we were confident would be an intense ramp in sales as weather improved."

During the quarter, Lowe's opened 24 new stores, including two relocations, and closed one older, smaller store. As of August 1, 2003, Lowe's operated 896 stores in 45 states representing 99.7 million square feet of retail selling space, a 12.5 percent increase over last year.

A conference call to discuss second quarter 2003 operating results is scheduled for today (Monday, August 18) at 9:00 a.m. EDT. Please dial 888-817-4020 (international callers dial 706-679-3245) 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 Investor Relations, Shareholder Services, Calendar of Events. A replay of the call will be archived on 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.

    Third Quarter 2003 (comparisons to third quarter 2002)
    * The company expects to open 38 stores reflecting square footage growth
      of approximately 14 percent
    * Total sales are expected to increase approximately 16 to 17 percent
    * The company expects to report comparable store sales of 5 to 6 percent
    * Operating margin (defined as gross margin less SG&A and depreciation) is
      expected to increase 20 to 30 basis points
    * Store opening costs are expected to be approximately $44 million
    * Diluted earnings per share of $0.50 to $0.51 are expected
    * Lowe's third quarter ends on October 31, 2003 with operating results to
      be publicly released on Monday, November 17, 2003

    Fiscal Year 2003 (comparisons to fiscal year 2002)
    * The company expects to open 130 stores in 2003 reflecting total square
      footage growth of approximately 15 percent
    * Total sales are expected to increase approximately 16 percent for the
      year
    * The company expects to report a comparable store sales increase of 4 to
      5 percent
    * Operating margin (defined as gross margin less SG&A and depreciation) is
      expected to increase 40 to 50 basis points
    * Store opening costs are expected to be approximately $140 million
    * Diluted earnings per share of $2.24 to $2.27 are expected for the fiscal
      year ending January 30, 2004 

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.

With fiscal year 2002 sales of $26.5 billion, Lowe's Companies, Inc. is a FORTUNE 100 company that serves approximately nine million customers a week at more than 875 home improvement stores in 45 states. In 2003, FORTUNE named Lowe's America's Most Admired Specialty Retailer. Based in Wilkesboro, N.C., the 57-year old company 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
                                           August 1, 2003 August 2, 2002
    Current Earnings                      Amount   Percent  Amount   Percent

    Net sales                             $ 8,773   100.00  $ 7,488   100.00

    Cost of sales                           6,126    69.83    5,286    70.59

    Gross margin                            2,647    30.17    2,202    29.41

    Expenses:

    Selling, general and administrative     1,431    16.31    1,233    16.47

    Store opening costs                        27     0.31       24     0.31

    Depreciation                              185     2.11      153     2.04

    Interest                                   45     0.51       46     0.62

    Total expenses                          1,688    19.24    1,456    19.44

    Pre-tax earnings                          959    10.93      746     9.97

    Income tax provision                      362     4.13      279     3.73

    Net earnings                          $   597     6.80  $   467     6.24


    Shares outstanding - Basic                784               779

    Basic earnings per share              $  0.76 $  0.60

    Shares outstanding - Diluted              804               800

    Diluted earnings per share            $  0.75 $  0.59


    Retained Earnings
    Balance at beginning of period        $ 6,288 $ 4,812
    Net earnings                              597               467
    Cash dividends                            (20)              (16)
    Balance at end of period              $ 6,865 $ 5,263


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

                                                  Six Months Ended
                                          August 1, 2003 August 2, 2002
    Current Earnings                      Amount  Percent  Amount  Percent

    Net sales                            $ 15,984  100.00 $ 13,958  100.00

    Cost of sales                          11,099   69.44    9,833   70.45

    Gross margin                            4,885   30.56    4,125   29.55

    Expenses:

    Selling, general and administrative     2,746   17.18    2,374   17.01

    Store opening costs                        47    0.29       60    0.43

    Depreciation                              364    2.28      299    2.14

    Interest                                   93    0.58       93    0.67

    Total expenses                          3,250   20.33    2,826   20.25

    Pre-tax earnings                        1,635   10.23    1,299    9.30

    Income tax provision                      618    3.87      486    3.48

    Net earnings                         $  1,017    6.36  $   813    5.82


    Shares outstanding - Basic                783              778

    Basic earnings per share             $   1.30 $  1.05

    Shares outstanding - Diluted              803              799

    Diluted earnings per share           $   1.27 $  1.02


    Retained Earnings
    Balance at beginning of period       $  5,887 $ 4,482
    Net earnings                            1,017              813
    Cash dividends                            (39)             (32)
    Balance at end of period             $  6,865 $ 5,263




    Lowe's Companies, Inc.
    Consolidated Balance Sheets
    In Millions, Except Par Value Data

                                           (Unaudited) (Unaudited)
                                            August 1,   August 2,  January 31,
                                               2003        2002        2003
    Assets

     Current assets:
     Cash and cash equivalents              $  1,550 $  1,487 $    853
     Short-term investments                      137          48        273
     Accounts receivable - net                   199         201        172
     Merchandise inventory                     4,652       3,987      3,968
     Deferred income taxes                        67         106         58
     Other assets                                226         182        244

     Total current assets                      6,831       6,011      5,568

     Property, less accumulated depreciation  10,955       9,260     10,352
     Long-term investments                       116          14         29
     Other assets                                172         142        160

     Total assets                           $ 18,074 $ 15,427 $ 16,109

    Liabilities and Shareholders' Equity

     Current liabilities:
     Short-term borrowings                  $     --    $     50 $     50
     Current maturities of long-term debt         73          44         29
     Accounts payable                          2,612       2,106      1,943
     Employee retirement plans                    40          75         88
     Accrued salaries and wages                  246         258        306
     Other current liabilities                 1,502       1,235      1,162

     Total current liabilities                 4,473       3,768      3,578

     Long-term debt, excluding current
      maturities                               3,684       3,733      3,736
     Deferred income taxes                       524         312        478
     Other long-term liabilities                  20          11         15

     Total liabilities                         8,701       7,824      7,807

     Shareholders' equity:
     Preferred stock - $5 par value,
      none issued                                 --          --         --
     Common stock - $.50 par value;
      Shares Issued and Outstanding
      August 1, 2003      785
      August 2, 2002      780
      January 31, 2003    782                    392         390        391
     Capital in excess of par                  2,116       1,949      2,023
     Retained earnings                         6,865       5,263      5,887
     Accumulated other comprehensive income       --           1          1

     Total shareholders' equity                9,373       7,603      8,302

     Total liabilities and shareholders'
      equity                                $ 18,074 $ 15,427 $ 16,109



    Lowe's Companies, Inc.
    Consolidated Statements of Cash Flows (Unaudited)
    In Millions
                                                    For the Six Months Ended
                                                   August 1,         August 2,
                                                     2003               2002
    Cash Flows From Operating Activities:
      Net Earnings                                $  1,017 $    813
      Adjustments to Reconcile Net Earnings to
       Net Cash Provided By Operating Activities:
        Depreciation and Amortization                  373               308
        Deferred Income Taxes                           37                (6)
        Loss on Disposition/Writedown of Fixed and
         Other Assets                                   15                 9
        Stock-based compensation expense                15                --
        Tax Effect of Stock Options Exercised           10                13
        Changes in Operating Assets and Liabilities:
         Accounts Receivable - Net                     (27)              (35)
         Merchandise Inventory                        (684)             (376)
         Other Operating Assets                         18                15
         Accounts Payable                              669               391
         Employee Retirement Plans                     (48)               15
         Other Operating Liabilities                   285               481
         Net Cash Provided by Operating Activities   1,680             1,628

    Cash Flows from Investing Activities:
      Decrease in Investment Assets:
       Short-Term Investments                          192                16
       Purchases of Long-Term Investments             (247)               (2)
       Proceeds from Sale/Maturity of Long-Term
        Investments                                     99                --
      Increase in Other Long-Term Assets               (28)              (16)
      Fixed Assets Acquired                         (1,010)             (910)
      Proceeds from the Sale of Fixed and Other
       Long-Term Assets                                 44                15
      Net Cash Used in Investing Activities           (950)             (897)

    Cash Flows from Financing Activities:
      Net (Decrease) Increase in Short-Term
       Borrowings                                      (50)              (50)
      Repayment of Long-Term Debt                      (17)              (29)
      Proceeds from Employee Stock Purchase Plan        25                23
      Proceeds from Stock Options Exercised             48                44
      Cash Dividend Payments                           (39)              (31)
      Net Cash Used in Financing Activities            (33)              (43)

    Net Increase in Cash and Cash Equivalents          697               688
    Cash and Cash Equivalents, Beginning of Period     853               799
    Cash and Cash Equivalents, End of Period      $  1,550 $  1,487 
SOURCE  Lowe's Companies, Inc.
    -0-                             08/18/2003
    /CONTACT:  shareholders and analysts, Paul Taaffe, +1-336-658-5239, or
media, Chris Ahearn, +1-336-658-7387, both of Lowe's Companies, Inc./
    /Photo:  NewsCom:  http://www.newscom.com/cgi-bin/prnh/20000720/LOWES
              AP Archive:  http://photoarchive.ap.org
              PRN Photo Desk, 888-776-6555 or 212-782-2840/
    /Web site:  http://www.lowes.com /
    (LOW)

CO:  Lowe's Companies, Inc.
ST:  North Carolina
IN:  REA
SU:  ERN CCA



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1219 08/18/2003 07:00 EDT http://www.prnewswire.com