Lowe's Reports Second Quarter Sales and Earnings Results

MOORESVILLE, N.C., Aug. 20, 2014 /PRNewswire/ -- Lowe's Companies, Inc. (NYSE: LOW) today reported net earnings of $1.04 billion for the quarter ended August 1, 2014, a 10.4 percent increase over the same period a year ago. Diluted earnings per share increased 18.2 percent to $1.04 from $0.88 in the second quarter of 2013. For the six months ended August 1, 2014, net earnings increased 12.2 percent from the same period a year ago to $1.66 billion, and diluted earnings per share increased 20.6 percent to $1.64. 

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Sales for the second quarter increased 5.7 percent to $16.6 billion from $15.7 billion in the second quarter of 2013, and comparable sales for the quarter increased 4.4 percent.  For the six month period, sales were $30.0 billion, a 4.2 percent increase over the same period a year ago, and comparable sales increased 2.8 percent.

"I would like to thank our employees for their hard work during our peak selling season, which helped us deliver solid results for the second quarter.  We were able to recover most of the outdoor product sales missed in the first quarter due to unfavorable weather conditions," commented Robert A. Niblock, Lowe's chairman, president and CEO.

"We believe home improvement spending will continue to progress in tandem with strengthening job and income growth," Niblock added.  "Our year-to-date sales performance, together with our previous assumptions for the second half of 2014, result in a modest reduction to our sales outlook for the year.  Our diluted earnings per share outlook is unchanged, which is a testament to our keen focus on profitability."

Delivering on its commitment to return excess cash to shareholders, the company repurchased $1.1 billion of stock under its share repurchase program and paid $183 million in dividends in the second quarter.  For the six month period, the company repurchased $2.0 billion of stock under its share repurchase program and paid $369 million in dividends. 

As of August 1, 2014, Lowe's operated 1,837 home improvement and hardware stores in the United States, Canada and Mexico representing 200.8 million square feet of retail selling space.

A conference call to discuss second quarter 2014 operating results is scheduled for today (Wednesday, August 20) 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 Second 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 November 18, 2014.

Lowe's Business Outlook

The company has combined its year-to-date sales performance with its previous assumptions for the second half of 2014 when providing the updated outlook below.

Fiscal Year 2014 (comparisons to fiscal year 2013; based on U.S. GAAP unless otherwise noted) 

• Total sales are expected to increase approximately 4.5 percent.
• Comparable sales are expected to increase approximately 3.5 percent.
• The company expects to open approximately 10 home improvement and 5 hardware stores.
• Earnings before interest and taxes as a percentage of sales (operating margin) are expected to increase approximately 65 basis points.
• The effective income tax rate is expected to be approximately 37.2%.
• Diluted earnings per share of approximately $2.63 are expected for the fiscal year ending January 30, 2015.  

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, higher fuel and other energy costs, slower growth in personal income, changes in consumer spending, changes in the rate of housing turnover, the availability and increasing regulation 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 in the level of repairs, remodeling, and additions to existing homes, as well as a 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) 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; (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 15 million customers a week in the United States, Canada and Mexico.  With fiscal year 2013 sales of $53.4 billion, Lowe's has more than 1,835 home improvement and hardware stores and 260,000 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.

SOURCE Lowe's Companies, Inc.