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News Release

Lowe's Reports Record Earnings for Fiscal 2006

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 $613 million for the 13-week period ended February 2, 2007, an 11.5 percent decline versus the 14-week period ended February 3, 2006. Diluted earnings per share declined 7.0 percent to $0.40 from $0.43 in the fourth quarter of 2005. For fiscal 2006, a 52-week year, net earnings grew 12.3 percent to $3.1 billion versus fiscal 2005, a 53-week year. Diluted earnings per share increased 15.0 percent to $1.99 in fiscal 2006.

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

Fourth quarter sales declined 3.7 percent to $10.4 billion for the 13-week period ended February 2, 2007 versus the 14-week period ended February 3, 2006. Fiscal 2006 sales increased to $46.9 billion, an 8.5 percent increase for the 52-week period ended February 2, 2007 versus the 53-week period ended February 3, 2006. Adjusting for the comparison to last year's 14-week fourth quarter and 53-week fiscal year as well as the corresponding calendar shift, total sales increased approximately five percent to last year in the fourth quarter and increased approximately ten percent for the fiscal year. Sales at the company's comparable stores, which were not affected by the calendar shift, declined 5.3 percent during the quarter and were flat for the year.

"Our continued focus on executing the fundamentals and providing customer- valued solutions drove solid results in a challenging operating environment," commented Robert A. Niblock, Lowe's chairman and CEO. "Sales continued to be pressured by a slowing housing market, tough comparisons to last year's hurricane recovery and rebuilding efforts and significant deflation in lumber and plywood prices.

"The hard work and dedication displayed by the entire Lowe's team helped us meet the many challenges faced during the year and sharpened our commitment to customer service. We achieved clear market share gains in many categories and a 12.3 percent increase in net earnings, while positioning the business for long-term growth.

"We are encouraged by indications that our sales trends have bottomed. As a result, we believe our comparable store sales performance will gradually improve throughout 2007."

During the quarter, Lowe's opened 58 new stores including 3 relocations. As of February 2, 2007, Lowe's operated 1,385 stores in 49 states representing 157.1 million square feet of retail selling space, a 12.1 percent increase over last year.

A conference call to discuss fourth quarter and fiscal 2006 operating results is scheduled for today (Friday, 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 2006 Earnings Conference Call Webcast. A replay of the call will be archived on Lowes.com until May 20, 2007.

    Lowe's Business Outlook
    First Quarter 2007 (comparisons to first quarter 2006)
     * The company expects to open 15 new stores reflecting square footage
       growth of approximately 11 percent
     * Total sales are expected to increase 5 to 6 percent
     * The company expects to report a comparable store sales decline of 2 to
       4 percent
     * Operating margin (defined as gross margin less SG&A and depreciation)
       is expected to decline approximately 150 basis points
     * Store opening costs are expected to be approximately $14 million
     * Diluted earnings per share of $0.49 to $0.51 are expected
     * Lowe's first quarter ends on May 4, 2007 with operating results to be
       publicly released on Monday, May 21, 2007

    Fiscal Year 2007 (comparisons to fiscal year 2006)
     * The company expects to open 150 to 160 stores in 2007 reflecting total
       square footage growth of approximately 11 percent
     * Total sales are expected to increase approximately 10 percent
     * The company expects comparable store sales to be approximately flat to
       up 2 percent
     * Operating margin (defined as gross margin less SG&A and depreciation)
       is expected to decline 70 to 80 basis points
     * Store opening costs are expected to be $140 to $145 million
     * Diluted earnings per share of $2.02 to $2.09 are expected for the
       fiscal year ending February 1, 2008

    Disclosure Regarding Forward-Looking Statements

This news release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Statements of the company's expectations for sales growth, comparable store sales, earnings and performance, capital expenditures, store openings, demand for services, and any statement of an assumption underlying any of the foregoing, constitute "forward-looking statements" under the Act. Although the company believes that the expectations, opinions, projections, and comments reflected in its forward-looking statements are reasonable, it can give no assurance that such statements will prove to be correct. A wide- variety of potential risks, uncertainties, and other factors could materially affect our ability to achieve the results expressed or implied by our forward- looking statements including, but not limited to, changes in general economic conditions, such as interest rate and currency fluctuations, fuel and other energy costs, slower growth in personal income and other factors which can negatively affect our customers as well as our ability to: (i) respond to decreases in the number of new housing starts and the level of repairs, remodeling, and additions to existing homes, as well as general reduction in commercial building activity; (ii) secure, develop, and otherwise implement new technologies and processes designed to enhance our efficiency and competitiveness; (iii) attract, train, and retain highly-qualified associates; (iv) locate, secure, and develop new sites for store development; (v) respond to fluctuations in the prices and availability of services, supplies, and products; (vi) respond to the growth and impact of competition; (vii) address legal and regulatory matters; and (viii) respond to unanticipated weather conditions. For more information about these and other risks and uncertainties that we are exposed to, you should read the "Risk Factors" included in our Annual Report on Form 10-K to the United States Securities and Exchange Commission and the descriptions of any material changes in those "Risk Factors" included in our subsequent Quarterly Reports on Form 10-Q.

The forward-looking statements contained in this news release speak only as of the date of this release and the company does not assume any obligation to update any such statements.

With fiscal year 2006 sales of $46.9 billion, Lowe's Companies, Inc. is a FORTUNE(R) 50 company that serves approximately 13 million customers a week at more than 1,375 home improvement stores in 49 states. Based in Mooresville, N.C., the 60-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

                                                   Quarters Ended
                                         February 2, 2007 February 3, 2006
                                            (13 Weeks)       (14 Weeks)
    Current Earnings                      Amount  Percent  Amount  Percent

    Net sales                             $10,406  100.00  $10,808  100.00

    Cost of sales                           6,719   64.56    7,023   64.98

    Gross margin                            3,687   35.44    3,785   35.02

    Expenses:

    Selling, general and administrative     2,335   22.44    2,303   21.31

    Store opening costs                        49    0.47       57    0.53

    Depreciation                              308    2.97      261    2.41

    Interest - net                             43    0.42       36    0.33

    Total expenses                          2,735   26.30    2,657   24.58

    Pre-tax earnings                          952    9.14    1,128   10.44

    Income tax provision                      339    3.25      435    4.02

    Net earnings                             $613    5.89     $693    6.42


    Weighted average shares
     outstanding - basic                    1,519            1,563

    Basic earnings per share                $0.40            $0.44

    Weighted average shares
     outstanding - diluted                  1,549            1,600

    Diluted earnings per share              $0.40            $0.43

    Cash dividends per share                $0.05            $0.03


    Retained Earnings
    Balance at beginning of period        $14,323          $11,544
    Net earnings                              613              693
    Cash dividends                            (76)             (46)
    Share repurchases                           -                -
    Balance at end of period              $14,860          $12,191


                                                    Years Ended
                                         February 2, 2007 February 3, 2006
                                            (52 Weeks)       (53 Weeks)
    Current Earnings                      Amount  Percent  Amount  Percent

    Net sales                             $46,927  100.00  $43,243  100.00

    Cost of sales                          30,729   65.48   28,453   65.80

    Gross margin                           16,198   34.52   14,790   34.20

    Expenses:

    Selling, general and administrative     9,738   20.75    9,014   20.84

    Store opening costs                       146    0.31      142    0.33

    Depreciation                            1,162    2.48      980    2.27

    Interest - net                            154    0.33      158    0.37

    Total expenses                         11,200   23.87   10,294   23.81

    Pre-tax earnings                        4,998   10.65    4,496   10.39

    Income tax provision                    1,893    4.03    1,731    4.00

    Net earnings                           $3,105    6.62   $2,765    6.39


    Weighted average shares
     outstanding - basic                    1,535            1,555

    Basic earnings per share                $2.02            $1.78

    Weighted average shares
     outstanding - diluted                  1,566            1,607

    Diluted earnings per share              $1.99            $1.73

    Cash dividends per share                $0.18            $0.11


    Retained Earnings
    Balance at beginning of period        $12,191           $9,597
    Net earnings                            3,105            2,765
    Cash dividends                           (276)            (171)
    Share repurchases                        (160)               -
    Balance at end of period              $14,860          $12,191



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


                                                 February 2,       February 3,
                                                     2007              2006
    Assets

       Current assets:
         Cash and cash equivalents                     $364              $423
         Short-term investments                         432               453
         Merchandise inventory - net                  7,144             6,635
         Deferred income taxes - net                    161               155
         Other current assets                           213               122

         Total current assets                         8,314             7,788

         Property, less accumulated
          depreciation                               18,971            16,354
         Long-term investments                          165               294
         Other assets                                   317               203

         Total assets                               $27,767           $24,639

    Liabilities and shareholders' equity

       Current liabilities:
         Short-term borrowings                          $23              $-
         Current maturities of long-term
          debt                                           88                32
         Accounts payable                             3,524             2,832
         Accrued salaries and wages                     372               424
         Self-insurance liabilities                     650               571
         Deferred revenue                               731               709
         Other current liabilities                    1,151             1,264

         Total current liabilities                    6,539             5,832

         Long-term debt, excluding current
          maturities                                  4,325             3,499
         Deferred income taxes - net                    735               735
         Other long-term liabilities                    443               277

         Total liabilities                           12,042            10,343

       Shareholders' equity:
         Preferred stock - $5 par value,
          none issued                                   -                 -
         Common stock - $.50 par value;
          Shares issued and outstanding
          February 2, 2007  1,525
          February 3, 2006  1,568                       762               784
         Capital in excess of par value                 102             1,320
         Retained earnings                           14,860            12,191
         Accumulated other comprehensive
          income                                          1                 1

         Total shareholders' equity                  15,725            14,296

         Total liabilities and
          shareholders' equity                      $27,767           $24,639



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

                                                     Years Ended

                                            February 2, 2007  February 3, 2006
                                                (52 Weeks)        (53 Weeks)
    Cash flows from operating activities:
     Net earnings                                   $3,105            $2,765
      Adjustments to reconcile net earnings
       to net cash provided by
       operating activities:
        Depreciation and amortization                1,237             1,051
        Deferred income taxes                           (6)              (37)
        Loss on disposition/writedown of
         fixed and other assets                         23                31
        Share-based payment expense                     62                76
        Changes in operating assets and
         liabilities:
          Merchandise inventory - net                 (509)             (785)
          Other operating assets                      (135)              (38)
          Accounts payable                             692               137
          Other operating liabilities                   33               642
     Net cash provided by operating  activities      4,502             3,842

    Cash flows from investing activities:
     Purchases of short-term investments              (284)           (1,829)
     Proceeds from sale/maturity of short-
      term investments                                 572             1,802
     Purchases of long-term investments               (558)             (354)
     Proceeds from sale/maturity of long-
      term investments                                 415                55
     Increase in other long-term assets                (16)              (30)
     Fixed assets acquired                          (3,916)           (3,379)
     Proceeds from the sale of fixed and
      other long-term assets                            72                61
     Net cash used in investing activities          (3,715)           (3,674)

    Cash flows from financing activities:
     Net increase in short-term borrowings              23               -
     Proceeds from issuance of long-term
      debt                                             989             1,013
     Repayment of long-term debt                       (33)             (633)
     Proceeds from issuance of common
      stock under employee stock purchase plan          76                65
     Proceeds from issuance of common
      stock from stock options exercised               100               225
     Cash dividend payments                           (276)             (171)
     Repurchase of common stock                     (1,737)             (774)
     Excess tax benefits of share-based
      payments                                          12               -
     Net cash used in financing activities            (846)             (275)

    Net decrease in cash and cash equivalents          (59)             (107)
    Cash and cash equivalents, beginning of period     423               530
    Cash and cash equivalents, end of period          $364              $423
SOURCE  Lowe's Companies, Inc.
    -0-                             02/23/2007
    /CONTACT:  Shareholders'-Analysts' Inquiries, Robbin Moore-Randolph,
+1-704-758-3579, or Media Inquiries, 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 /
    (LOW)

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

CB-MC
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0263 02/23/2007 07:00 EST http://www.prnewswire.com