Exhibit 99.1
August 18, 2003 For 7:00 am EDT Release
Contacts: | Shareholders'/Analysts' Inquiries: | Media Inquiries: |
Paul Taaffe | Chris Ahearn | |
336-658-5239 | 336-658-7387 |
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. - 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.
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.
| ||||||||||
| Three Months Ended | Six Months Ended | ||||||||
August 1, 2003 | August 2, 2002 | August 1, 2003 | August 2, 2002 | |||||||
Current Earnings | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | ||
Net Sales | $ 8,773 | 100.00 | $ 7,488 | 100.00 | $ 15,984 | 100.00 | $ 13,958 | 100.00 | ||
Cost of Sales | 6,126 | 69.83 | 5,286 | 70.59 | 11,099 | 69.44 | 9,833 | 70.45 | ||
Gross Margin | 2,647 | 30.17 | 2,202 | 29.41 | 4,885 | 30.56 | 4,125 | 29.55 | ||
Expenses: | ||||||||||
Selling, general and administrative | 1,431 | 16.31 | 1,233 | 16.47 | 2,746 | 17.18 | 2,374 | 17.01 | ||
Store opening costs | 27 | 0.31 | 24 | 0.31 | 47 | 0.29 | 60 | 0.43 | ||
Depreciation | 185 | 2.11 | 153 | 2.04 | 364 | 2.28 | 299 | 2.14 | ||
Interest | 45 | 0.51 | 46 | 0.62 | 93 | 0.58 | 93 | 0.67 | ||
Total expenses | 1,688 | 19.24 | 1,456 | 19.44 | 3,250 | 20.33 | 2,826 | 20.25 | ||
Pre-tax earnings | 959 | 10.93 | 746 | 9.97 | 1,635 | 10.23 | 1,299 | 9.30 | ||
Income tax provision | 362 | 4.13 | 279 | 3.73 | 618 | 3.87 | 486 | 3.48 | ||
Net earnings | $ 597 | 6.80 | $ 467 | 6.24 | $ 1,017 | 6.36 | $ 813 | 5.82 | ||
Shares outstanding - Basic | 784 | 779 | 783 | 778 | ||||||
Basic earnings per share | $ 0.76 | $ 0.60 | $ 1.30 | $ 1.05 | ||||||
Shares outstanding - Diluted | 804 | 800 | 803 | 799 | ||||||
Diluted earnings per share | $ 0.75 | $ 0.59 | $ 1.27 | $ 1.02 | ||||||
Retained Earnings | ||||||||||
Balance at beginning of period | $ 6,288 | $ 4,812 | $ 5,887 | $ 4,482 | ||||||
Net earnings | 597 | 467 | 1,017 | 813 | ||||||
Cash dividends | (20) | (16) | (39) | (32) | ||||||
Balance at end of period | $ 6,865 | $ 5,263 | $ 6,865 | $ 5,263 |
Lowe's Companies, Inc.
| ||||||||
(Unaudited) August 1, 2003 | (Unaudited) August 2, 2002 | January 31, 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.
| ||||||||
For the Six Months Ended | ||||||||
August 1, 2003 | August 2, 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 (Increase) in Investment Assets: | ||||||||
Short-Term Investments | 192 | 16 | ||||||
Purchase 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 Provided by Investing Activities | (950) | (897) | ||||||
Cash Flows from Financing Activities: | ||||||||
Net (Decrease) 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 | ||||||