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News Release

Lowe's Reports Record Earnings for Fourth Quarter and Fiscal Year
            -- Fourth Quarter Net Earnings Increased 28 Percent --

            -- Fourth Quarter Total Sales Increased 20 Percent --

     -- Fiscal 2003 Net Earnings Increased 28 Percent to $1.88 Billion --

MOORESVILLE, N.C., Feb. 23 /PRNewswire-FirstCall/ -- Lowe's Companies, Inc. (NYSE: LOW), the world's second largest home improvement retailer, today reported net earnings of $407 million for the quarter ended January 30, 2004, a 27.6 percent increase over the same period a year ago. Diluted earnings per share increased 27.5 percent to $0.51 from $0.40 in the fourth quarter of 2002. For the year ended January 30, 2004, net earnings grew 27.6 percent to $1.88 billion while diluted earnings per share increased 26.5 percent to $2.34.

(Logo: http://www.newscom.com/cgi-bin/prnh/20031205/LOWLOGO )

Sales for the quarter increased 20.1 percent to $7.25 billion, up from $6.04 billion in the fourth quarter of 2002. Comparable store sales for the fourth quarter increased 7.3 percent. For the year ended January 30, 2004, sales increased 18.1 percent to $30.8 billion. Comparable store sales increased 6.7 percent for fiscal 2003. All sales figures are from continuing operations and exclude sales from the Contractor Yard locations.

On January 30, 2004, Lowe's completed the previously announced sale of 26 commodity-focused locations operating under the Contractor Yard name. The Contractor Yard locations are reported as discontinued operations in the Consolidated Statements of Current and Retained Earnings.

"This year's outstanding results are further evidence that Lowe's strategic course is a proven success," said Robert L. Tillman, Lowe's chairman and CEO. "Our employees' diligent efforts led to what was among the best two- year performances in all of retail. We're confident we have our finger on the pulse of consumer and business trends and will continue to build on our successful operating model to maintain our premier position in retailing well into the future."

"Despite the weather-driven challenges we faced in the first quarter of 2003, our management team and dedicated employees kept their eye on the ball and delivered an outstanding year on top of a phenomenal performance in 2002," explained Lowe's President Robert A. Niblock. "We continue to see strong results from our metro-market expansion, and our up-the-continuum merchandising strategy and branding initiatives continue to provide our customers the best products and services to meet their home improvement needs. The key ingredient in this formula remains our outstanding customer service, which we continue to deliver in an inspirational store environment."

During the quarter, Lowe's opened 47 new stores, including one relocation. As of January 30, 2004, Lowe's operated 952 stores in 45 states representing 108.8 million square feet of retail selling space, a 14.8 percent increase over last year.

A conference call to discuss fourth quarter and fiscal year 2003 operating results is scheduled for today (Monday, February 23) at 9:00 a.m. EST. 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/investor and clicking on Lowe's Fourth Quarter and Fiscal Year 2003 Earnings Conference Call Webcast. A replay of the call will be archived on Lowes.com for 7 days.

Emerging Issues Task Force Issue 02-16

The impact of Emerging Issues Task Force ("EITF") Issue 02-16, "Accounting by a Customer (including a Reseller) for Certain Consideration Received from a Vendor", will be recognized in 2004 and modifies accounting for certain funds received from vendors.

Prior to 2004, funds from vendors for co-op advertising and in-store services were allowed to be treated as a direct offset to the associated expense. EITF 02-16 requires retailers to treat certain of these funds as a reduction of cost of goods, recognizing the benefit when the inventory is sold. There is no impact to the timing of when the funds are received from vendors or the associated cash flows, but there is an impact to the timing of income recognition.

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.

    First Quarter 2004 (comparisons to first quarter 2003)
     * The company expects to open 29 stores reflecting square footage growth
       of approximately 15 percent
     * Total sales are expected to increase 18 to 19 percent
     * The company expects to report comparable store sales of 6 to 7 percent
     * Including the estimated 200 basis point negative impact of adopting
       EITF 02-16, operating margin (defined as gross margin less SG&A and
       depreciation) is expected to decline 130 to 140 basis points
     * Store opening costs are expected to be approximately $25 million
     * Including the estimated $0.13 negative impact of adopting EITF 02-16,
       diluted earnings per share of $0.52 to $0.54 are expected.  Excluding
       the impact of adopting the accounting change, diluted earnings per
       share of $0.65 to $0.67 would be expected.
     * Lowe's first quarter ends on April 30, 2004 with operating results to
       be publicly released on Monday, May 17, 2004

    Fiscal Year 2004 (comparisons to fiscal year 2003)
     * The company expects to open 140 stores in 2004 reflecting total square
       footage growth of approximately 14 percent
     * Total sales are expected to increase approximately 17 percent for the
       year
     * The company expects to report a comparable store sales increase of 5 to
       6 percent
     * Including the estimated 50 basis point negative impact of adopting EITF
       02-16, operating margin (defined as gross margin less SG&A and
       depreciation) is expected to decline 20 to 30 basis points
     * Store opening costs are expected to be approximately $137 million
     * Including the estimated $0.13 negative impact of adopting EITF 02-16,
       diluted earnings per share of $2.63 to $2.66 are expected for the
       fiscal year ending January 28, 2005.  Excluding the impact of adopting
       the accounting change, diluted earnings per share of $2.76 to $2.79
       would be expected.

    Fiscal Year 2005 (comparisons to fiscal year 2004)
     * The company expects to open 150 stores in 2005 reflecting total square
       footage growth of 13 to 14 percent
     * Total sales are expected to increase approximately 17 percent for the
       year
     * Operating margin (defined as gross margin less SG&A and depreciation)
       is expected to increase 40 to 60 basis points
     * Diluted earnings per share of $3.29 to $3.34 are expected for the
       fiscal year ending January 27, 2006

Additional supporting documents detailing continuing operations and the effect of implementing EITF 02-16 can be found on www.Lowes.com/investor.

This news release includes statements, estimates or projections that constitute "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, changes in domestic 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. We provide additional information regarding these and other risks and uncertainties in our filings with the Securities and Exchange Commission. The forward-looking statements contained in this news release speak only as of this date and we do not assume any obligation to update them.

With fiscal year 2003 sales of $30.8 billion, Lowe's Companies, Inc. is a FORTUNE 100 company that serves approximately 10 million customers a week at more than 950 home improvement stores in 45 states. In 2003, FORTUNE named Lowe's America's Most Admired Specialty Retailer. Based in Mooresville, N.C., the 58-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
                                           January 30, 2004  January 31, 2003
    Current Earnings                       Amount   Percent  Amount   Percent

    Net sales                              $7,252   100.00   $6,037   100.00

    Cost of sales                           4,931    68.00    4,119    68.23

    Gross margin                            2,321    32.00    1,918    31.77

    Expenses:

    Selling, general and administrative     1,378    19.00    1,151    19.07

    Store opening costs                        45     0.62       40     0.66

    Depreciation                              203     2.80      168     2.78

    Interest                                   45     0.62       45     0.75

    Total expenses                          1,671    23.04    1,404    23.26

    Pre-tax earnings                          650     8.96      514     8.51

    Income tax provision                      249     3.43      197     3.26

    Earnings from continuing operations       401     5.53      317     5.25

    Earnings from discontinued
     operations, net of tax                     6     0.08        2     0.03

    Net earnings                             $407     5.61     $319     5.28

    Shares outstanding - Basic                787               782

    Basic earnings per share
    Continuing operations                    0.51              0.41
    Discontinued operations                  0.01               -
    Basic earnings per share                $0.52             $0.41

    Shares outstanding - Diluted              809               801

    Diluted earnings per share
    Continuing operations                    0.50              0.40
    Discontinued operations                  0.01               -
    Diluted earnings per share              $0.51             $0.40

    Retained Earnings
    Balance at beginning of period         $7,293            $5,587
    Net earnings                              407               319
    Cash dividends                            (23)              (19)
    Balance at end of period               $7,677            $5,887


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

                                                     Year Ended
                                          January 30, 2004 January 31, 2003
    Current Earnings                       Amount  Percent  Amount  Percent

    Net sales                             $30,838  100.00  $26,112  100.00

    Cost of sales                          21,231   68.85   18,164   69.56

    Gross margin                            9,607   31.15    7,948   30.44

    Expenses:

    Selling, general and administrative     5,543   17.97    4,676   17.91

    Store opening costs                       128    0.42      129    0.49

    Depreciation                              758    2.46      622    2.38

    Interest                                  180    0.58      182    0.70

    Total expenses                          6,609   21.43    5,609   21.48

    Pre-tax earnings                        2,998    9.72    2,339    8.96

    Income tax provision                    1,136    3.68      880    3.38

    Earnings from continuing operations     1,862    6.04    1,459    5.58

    Earnings from discontinued
     operations, net of tax                    15    0.05       12    0.05

    Net earnings                           $1,877    6.09   $1,471    5.63

    Shares outstanding - Basic                785              779

    Basic earnings per share
    Continuing operations                    2.37             1.87
    Discontinued operations                  0.02             0.02
    Basic earnings per share                $2.39            $1.89

    Shares outstanding - Diluted              806              800

    Diluted earnings per share
    Continuing operations                    2.32             1.83
    Discontinued operations                  0.02             0.02
    Diluted earnings per share              $2.34            $1.85

    Retained Earnings
    Balance at beginning of period         $5,887           $4,482
    Net earnings                            1,877            1,471
    Cash dividends                            (87)             (66)
    Balance at end of period               $7,677           $5,887


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

                                                 January 30,       January 31,
                                                     2004              2003
    Assets

         Current assets:
         Cash and cash equivalents                  $1,446              $853
         Short-term investments                        178               273
         Accounts receivable - net                     131               172
         Merchandise inventory                       4,584             3,968
         Deferred income taxes                          59                58
         Other assets                                  289               244

         Total current assets                        6,687             5,568

         Property, less accumulated
          depreciation                              11,945            10,352
         Long-term investments                         169                29
         Other assets                                  241               160

         Total assets                              $19,042           $16,109

    Liabilities and Shareholders' Equity

         Current liabilities:

         Short-term borrowings                     $     -               $50
         Current maturities of long-term
          debt                                          77                29
         Accounts payable                            2,366             1,943
         Employee retirement plans                      74                88
         Accrued salaries and wages                    335               306
         Other current liabilities                   1,516             1,162

         Total current liabilities                   4,368             3,578

         Long-term debt, excluding
          current maturities                         3,678             3,736
         Deferred income taxes                         657               478
         Other long-term liabilities                    30                15

         Total liabilities                           8,733             7,807

         Shareholders' equity:
         Preferred stock - $5 par value,
          none issued                                    -                 -
         Common stock - $.50 par value;
               Shares Issued and Outstanding
              January 30, 2004    787
              January 31, 2003    782                  394               391
         Capital in excess of par                    2,237             2,023
         Retained earnings                           7,677             5,887
         Accumulated other comprehensive income          1                 1

         Total shareholders' equity                 10,309             8,302

         Total liabilities and
          shareholders' equity                     $19,042           $16,109


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

                                                        Years Ended
                                             Jan. 30,     Jan. 31,    Feb. 1,
                                               2004        2003        2002
    Cash Flows From Operating Activities:
     Net Earnings                             $1,877      $1,471      $1,023
      Earnings from discontinued operations,
       net of tax                                (15)        (12)        (13)
      Earnings from continuing operations      1,862       1,459       1,010

    Adjustments to Reconcile Earnings
     from Continuing Operations to Net Cash
     Provided By Operating Activities:
             Depreciation and Amortization       781         641         530
             Deferred Income Taxes               178         208          42
             Loss on Disposition/Writedown of
              Fixed and Other Assets              31          18          39
             Stock-based compensation expense     41           -           -
             Tax Effect of Stock Options
              Exercised                           31          29          35
             Changes in Operating Assets
              and Liabilities:                                 -           -
               Accounts Receivable - Net           2          (9)         (5)
               Merchandise Inventory            (648)       (357)       (326)
               Other Operating Assets            (45)        (41)        (37)
               Accounts Payable                  423         228           1
               Employee Retirement Plans         (14)         40         114
               Other Operating
                Liabilities                      399         461         193
    Net Cash Provided by Operating
     Activities from Continuing Operations     3,041       2,677       1,596

    Cash Flows from Investing Activities:
      Decrease (Increase) in Investment Assets:
            Short-Term Investments               139        (203)        (30)
            Purchases of Long-Term Investments  (381)        (24)         (1)
            Proceeds from Sale/Maturity
             of Long-Term Investments            193           -           3
         Increase in Other Long-Term Assets      (95)        (33)        (14)
         Fixed Assets Acquired                (2,444)     (2,359)     (2,196)
         Proceeds from the Sale of Fixed
          and Other Long-Term Assets              45          44          42
         Net Cash Used in Investing Activities
          from Continuing Operations          (2,543)     (2,575)     (2,196)

    Cash Flows from Financing Activities:
         Net Decrease in Short-Term Borrowings   (50)        (50)       (150)
         Long-Term Debt Borrowings                 -           -       1,087
         Repayment of Long-Term Debt             (29)        (63)        (63)
         Proceeds from Employee Stock
          Purchase Plan                           51          50          38
         Proceeds from Stock Options Exercised    97          65          77
         Cash Dividend Payments                  (86)        (66)        (60)
         Net Cash (Used in) Provided by
          Financing Activities from
          Continuing Operations                  (17)        (64)        929

    Net Cash Provided by Discontinued
     Operations                                  112          16          14

    Net Increase in Cash and Cash
     Equivalents                                 593          54         343
    Cash and Cash Equivalents, Beginning
     of Period                                   853         799         456
    Cash and Cash Equivalents, End of Period  $1,446        $853        $799
SOURCE  Lowe's Companies, Inc.
    -0-                             02/23/2004
    /CONTACT:  Shareholders-Analysts, Paul Taaffe, +1-704-758-2033, or Media,
Chris Ahearn +1-704-758-2304, both of Lowe's Companies, Inc./
    /Photo:  http://www.newscom.com/cgi-bin/prnh/20031205/LOWLOGO
             AP Archive:  http://photoarchive.ap.org
             PRN Photo Desk, photodesk@prnewswire.com/
    /Web site:  http://www.lowes.com
                http://www.Lowes.com/investor /
    (LOW)

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

WB-JJ 
-- CLM019 --
3004 02/23/2004 07:00 EST http://www.prnewswire.com