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News Release

Lowe's Reports Fourth Quarter Sales And Earnings Results
-- Comparable Sales Increased 7.3 Percent --
-- Diluted Earnings Per Share Increased 58.6 Percent to a Record $0.46 --

MOORESVILLE, N.C., Feb. 25, 2015 /PRNewswire/ -- Lowe's Companies, Inc. (NYSE: LOW) today reported net earnings of $450 million for the quarter ended January 30, 2015, a 47.0 percent increase over the same period a year ago. Diluted earnings per share increased 58.6 percent to $0.46 from $0.29 in the fourth quarter of 2013. For the fiscal year ended January 30, 2015, net earnings increased 18.0 percent from the same period a year ago to $2.7 billion, and diluted earnings per share increased 26.6 percent to $2.71

Lowe's Companies, Inc. Logo

Sales for the fourth quarter increased 7.6 percent to $12.5 billion from $11.7 billion in the fourth quarter of 2013, and comparable sales for the quarter increased 7.3 percent. Comparable sales for the U.S. business increased 7.4%. For the fiscal year, sales were $56.2 billion, a 5.3 percent increase over the same period a year ago, and comparable sales increased 4.3 percent on a consolidated basis and for the U.S. business.

"I would like to thank our employees for their hard work and dedication," commented Robert A. Niblock, Lowe's chairman, president and CEO.  "Their steadfast commitment to serving customers is critical to our success, and an important driver of this quarter's strong results.

"We remain focused on improving our profitability even while investing in key capabilities to drive sales growth," Niblock added.  "Our transformation is gaining momentum, and macroeconomic fundamentals are aligned for modestly stronger home improvement industry growth in 2015." 

Delivering on its commitment to return excess cash to shareholders, the company repurchased $1.0 billion of stock under its share repurchase program and paid $225 million in dividends in the fourth quarter.  For the fiscal year, the company repurchased $3.9 billion of stock under its share repurchase program and paid $822 million in dividends. 

As of January 30, 2015, Lowe's operated 1,840 home improvement and hardware stores in the United States, Canada and Mexico representing 200.9 million square feet of retail selling space.

A conference call to discuss fourth quarter 2014 operating results is scheduled for today (Wednesday, February 25) at 9:00 am ET.  The conference call will be available by webcast and can be accessed by visiting Lowe's website at www.Lowes.com/investor and clicking on Lowe's Fourth Quarter 2014 Earnings Conference Call Webcast.  Supplemental slides will be available fifteen minutes prior to the start of the conference call. A replay of the call will be archived on Lowes.com/investor until May 19, 2015.

Lowe's Business Outlook

Fiscal Year 2015 (comparisons to fiscal year 2014; based on U.S. GAAP unless otherwise noted) 

  • Total sales are expected to increase 4.5 to 5 percent.
  • Comparable sales are expected to increase 4 to 4.5 percent.
  • The company expects to open 15 to 20 home improvement and hardware stores.
  • Earnings before interest and taxes as a percentage of sales (operating margin) are expected to increase 80 to 100 basis points.
  • The effective income tax rate is expected to be approximately 38.1%.
  • Diluted earnings per share of approximately $3.29 are expected for the fiscal year ending January 29, 2016.

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 sales, earnings and performance, shareholder value, capital expenditures, cash flows, the housing market, the home improvement industry, demand for services, share repurchases, the Company's strategic initiatives and any statement of an assumption underlying any of the foregoing, constitute "forward-looking statements" under the Act.   Although we believe that the expectations, opinions, projections, and comments reflected in these forward-looking statements are reasonable, we 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 either expressed or implied by our 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 which can negatively affect our customers, as well as our ability to: (i) respond to adverse trends in the housing industry, such as the psychological effects of lower home prices, and moderating 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 designed to enhance our efficiency and competitiveness; (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; and (ix) respond to unanticipated weather conditions that could adversely affect sales. In addition, we could experience additional impairment losses if 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. For more information about these and other risks and uncertainties that we are exposed to, you should read the "Risk Factors" and "Critical Accounting Policies and Estimates" included in our Annual Report on Form 10-K to the United States Securities and Exchange Commission (the "SEC") and the description of material changes therein or updated version thereof, if any, included in our Quarterly Reports on Form 10-Q.

The forward-looking statements contained in this news release 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 the "Risk Factors" included in our Annual Report on Form 10-K to the SEC and the description of material changes, if any, therein included in our Quarterly Reports on Form 10-Q.  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.

Lowe's Companies, Inc. (NYSE: LOW) is a FORTUNE® 100 home improvement company serving approximately 16 million customers a week in the United States, Canada and Mexico through its stores and online at lowes.com, lowes.ca and lowes.com.mx.  With fiscal year 2014 sales of $56.2 billion, Lowe's has 1,840 home improvement and hardware stores and more than 265,000 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.

 

Lowe's Companies, Inc.
















Consolidated Statements of Current and Retained Earnings



In Millions, Except Per Share and Percentage Data

































Three months ended



Year ended





  (Unaudited) 



  (Unaudited) 



  (Unaudited) 









January 30, 2015



January 31, 2014



January 30, 2015



January 31, 2014

Current Earnings




 Amount 

Percent



 Amount 

Percent



 Amount 

Percent



 Amount 

Percent

Net sales



$

12,540

100.00


$

11,660

100.00


$

56,223

100.00


$

53,417

100.00



















Cost of sales




8,194

65.34



7,618

65.33



36,665

65.21



34,941

65.41



















Gross margin




4,346

34.66



4,042

34.67



19,558

34.79



18,476

34.59



















Expenses:




































Selling, general and administrative




3,165

25.24



3,045

26.12



13,281

23.62



12,865

24.08



















Depreciation




362

2.89



370

3.17



1,485

2.64



1,462

2.74



















Interest - net




132

1.05



128

1.10



516

0.92



476

0.89



















Total expenses




3,659

29.18



3,543

30.39



15,282

27.18



14,803

27.71



















Pre-tax earnings 




687

5.48



499

4.28



4,276

7.61



3,673

6.88



















Income tax provision 




237

1.90



193

1.66



1,578

2.81



1,387

2.60



















Net earnings



$

450

3.58


$

306

2.62


$

2,698

4.80


$

2,286

4.28





































Weighted average common shares outstanding - basic




964




1,035




988




1,059




















Basic earnings per common share (1)



$

0.46



$

0.29



$

2.71



$

2.14




















Weighted average common shares outstanding - diluted




967




1,037




990




1,061




















Diluted earnings per common share (1)



$

0.46



$

0.29



$

2.71



$

2.14




















Cash dividends per share



$

0.23



$

0.18



$

0.87



$

0.70






































Retained Earnings


















Balance at beginning of period



$

10,271



$

12,103



$

11,355



$

13,224


Net earnings 




450




306




2,698




2,286


Cash dividends




(222)




(186)




(858)




(741)


Share repurchases




(908)




(868)




(3,604)




(3,414)


Balance at end of period



$

9,591



$

11,355



$

9,591



$

11,355






































(1) Under the two-class method, earnings per share is calculated using net earnings allocable to common shares, which is derived by reducing net earnings by the earnings allocable to participating securities. Net earnings allocable to common shares used in the basic and diluted earnings per share calculation were $447 million for the three months ended January 30, 2015 and $304 million for the three months ended January 31, 2014. Net earnings allocable to common shares used in the basic and diluted earnings per share calculation were $2,682 million for the year ended January 30, 2015 and $2,271 million for the year ended January 31, 2014.

 

Lowe's Companies, Inc.
















Consolidated Statements of Comprehensive Income










In Millions, Except Percentage Data






































Three months ended



Year ended





(Unaudited)



(Unaudited)



(Unaudited)








January 30, 2015



January 31, 2014



January 30, 2015



January 31, 2014





 Amount 

Percent



 Amount 

Percent



 Amount 

Percent



 Amount 

Percent

Net earnings



$

450

3.58


$

306

2.62


$

2,698

4.80


$

2,286

4.28



















Foreign currency translation adjustments - net of tax




(75)

(0.59)



(40)

(0.34)



(86)

(0.15)



(68)

(0.13)



















Net unrealized investment losses - net of tax




-

-



-

-



-

-



(1)

-



















Other comprehensive loss




(75)

(0.59)



(40)

(0.34)



(86)

(0.15)



(69)

(0.13)



















Comprehensive income



$

375

2.99


$

266

2.28


$

2,612

4.65


$

2,217

4.15




















 

Lowe's Companies, Inc.








Consolidated Balance Sheets








In Millions, Except Par Value Data



















 (Unaudited) 








January 30, 2015



January 31, 2014


Assets
















     Current assets:








     Cash and cash equivalents


$

466


$

391


     Short-term investments 



125



185


     Merchandise inventory - net



8,911



9,127


     Deferred income taxes - net 



230



252


     Other current assets



348



341










     Total current assets



10,080



10,296










     Property, less accumulated depreciation  



20,034



20,834


     Long-term investments 



354



279


     Other assets



1,359



1,323










     Total assets


$

31,827


$

32,732










Liabilities and Shareholders' Equity
















     Current liabilities:








     Short-term borrowings


$

-


$

386


     Current maturities of long-term debt



552



49


     Accounts payable



5,124



5,008


     Accrued compensation and employee benefits 


773



785


     Deferred revenue



979



892


     Other current liabilities



1,920



1,756










     Total current liabilities



9,348



8,876










     Long-term debt, excluding current maturities 


10,815



10,086


     Deferred income taxes - net  



97



291


     Deferred revenue - extended protection plans


730



730


     Other liabilities 



869



896










     Total liabilities



21,859



20,879










     Shareholders' equity:








     Preferred stock - $5 par value, none issued



-



-


     Common stock - $.50 par value; 








Shares issued and outstanding








January 30, 2015

960







January 31, 2014

1,030


480



515


     Capital in excess of par value



-



-


     Retained earnings



9,591



11,355


     Accumulated other comprehensive loss



(103)



(17)










     Total shareholders' equity



9,968



11,853










     Total liabilities and shareholders' equity

$

31,827


$

32,732


























 

Lowe's Companies, Inc.





Consolidated Statements of Cash Flows



In Millions












Year Ended



(Unaudited)





January 30, 2015


January 31, 2014

Cash flows from operating activities:





Net earnings 


$                       2,698


$                      2,286

Adjustments to reconcile net earnings to net cash provided by





operating activities:





Depreciation and amortization


1,586


1,562

Deferred income taxes


(171)


(162)

Loss on property and other assets - net


25


64

Loss on equity method investments


57


52

Share-based payment expense


119


100

Changes in operating assets and liabilities:





Merchandise inventory - net


170


(396)

Other operating assets


130


(5)

Accounts payable 


127


291

Other operating liabilities


188


319

Net cash provided by operating activities


4,929


4,111






Cash flows from investing activities:





Purchases of investments


(820)


(759)

Proceeds from sale/maturity of investments


805


709

Capital expenditures


(880)


(940)

Contributions to equity method investments - net


(241)


(173)

Proceeds from sale of property and other long-term assets


52


75

Acquisition of business - net


-


(203)

Other - net


(4)


5

Net cash used in investing activities


(1,088)


(1,286)






Cash flows from financing activities:





Net change in short-term borrowings


(386)


386

Net proceeds from issuance of long-term debt


1,239


985

Repayment of long-term debt


(48)


(47)

Proceeds from issuance of common stock under
   share-based payment plans


137


165

Cash dividend payments


(822)


(733)

Repurchase of common stock


(3,905)


(3,710)

Other - net


24


(15)

Net cash used in financing activities


(3,761)


(2,969)






Effect of exchange rate changes on cash


(5)


(6)






Net increase/(decrease) in cash and cash equivalents


75


(150)

Cash and cash equivalents, beginning of year


391


541

Cash and cash equivalents, end of year


$                        466


$                       391






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SOURCE Lowe's Companies, Inc.

Shareholders'/Analysts' Inquiries: Tiffany Mason, 704-758-2033, tiffany.l.mason@lowes.com, or Media Inquiries: Chris Ahearn, 704-758-2304, chris.c.ahearn@lowes.com