LOWE’S REPORTS RECORD SECOND QUARTER EARNINGS
-- Second Quarter Total Sales Increased 17.3 Percent -
-- Second Quarter Comparable Store Sales Increased 6.5 Percent --
MOORESVILLE, N.C. - Lowe’s Companies, Inc. (NYSE: LOW), the world’s second largest home improvement retailer, today reported net earnings of $838 million for the quarter ended July 29, 2005, a 19.7 percent increase over the same period a year ago. Diluted earnings per share increased 20.7 percent to $1.05 from $0.87 in the second quarter of 2004. For the six months ended July 29, 2005, net earnings grew 24.0 percent to $1.43 billion while diluted earnings per share increased 24.5 percent to $1.78.
Sales for the quarter increased 17.3 percent to $11.9 billion, up from $10.2 billion in the second quarter of 2004. Comparable store sales for the second quarter increased 6.5 percent. For the six months ended July 29, 2005, sales increased 15.9 percent to $21.8 billion. Comparable store sales increased 5.2 percent in the first half of 2005.
“Building on the strong sales trends we experienced in April, our stores delivered solid comparable store sales across all three months of the quarter,” explained Robert A. Niblock, Lowe’s chairman, president and CEO. “Comp sales above our original guidance were driven by our Big 3 sales initiatives of Installed Sales, Special Order Sales and sales to Commercial Business Customers, all of which remain core to our performance. Successful traffic-driving marketing campaigns, in conjunction with great merchandising and store execution, led to comparable store increases in both average ticket and transaction counts in the quarter.”
“Favorable social and demographic trends, a robust housing market and an unwavering organizational commitment to provide unmatched service and solutions for our customers continue to give us confidence in the future for Lowe’s,” Niblock added. “We remain committed to invest in all areas of our business with well-trained employees, industry-leading stores and state-of-the-art systems to ensure we execute our vision to be the first choice for home improvement in each and every market we serve.”
During the quarter, Lowe’s opened 27 new stores including one relocation. As of July 29, 2005, Lowe’s operated 1,138 stores in 49 states representing 129.4 million square feet of retail selling space, a 13.7 percent increase over last year.
A conference call to discuss second quarter 2005 operating results is scheduled for today (Monday, August 15) 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/investor and clicking on Lowe’s Second Quarter 2005 Earnings Conference Call Webcast. A replay of the call will be archived on Lowes.com until November 13, 2005.
Third Quarter 2005 (comparisons to third quarter 2004)
| · | The company expects to open 34 stores reflecting square footage growth of approximately 13 percent |
| · | Total sales are expected to increase approximately 16 percent |
| · | The company expects to report a comparable store sales increase of 4 to 6 percent |
| · | Operating margin (defined as gross margin less SG&A and depreciation) is expected to increase approximately 10 basis points |
| · | Store opening costs are expected to be approximately $36 million |
| · | Diluted earnings per share of $0.76 to $0.78 are expected |
| · | Lowe’s third quarter ends on October 28, 2005 with operating results to be publicly released on Monday, November 14, 2005 |
Fiscal Year 2005 - a 53-week Year (comparisons to fiscal year 2004 - a 52-week year)
| · | The company expects to open 150 stores in 2005 reflecting total square footage growth of approximately 13 percent |
| · | Total sales are expected to increase approximately 17 percent for the year |
| · | The company expects to report a comparable store sales increase of approximately 5 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 $132 million |
| · | Diluted earnings per share of $3.31 to $3.37 are expected for the fiscal year ending February 3, 2006 |
| Disclosure Regarding Forward-Looking Statements |
This news release includes "forward-looking statements" within the meaning 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: (i) changes in general economic conditions which can negatively affect our customers’ spending patterns; (ii) 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; (iii) ability to secure, develop, and otherwise implement new technologies and processes designed to enhance our efficiency and competitiveness; (iv) ability to attract, train, and retain highly-qualified associates; (v) ability to locate, secure, and develop new sites for store development; (vi) fluctuations in the prices and availability of services, supplies, and products; (vii) growth and impact of competition; (viii) ability to address legal and regulatory matters; and (ix) impact of unanticipated weather conditions. Additional information regarding these and other risks and uncertainties are provided in our periodic filings with the Securities and Exchange Commission. 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 2004 sales of $36.5 billion, Lowe’s Companies, Inc. is a FORTUNE® 50 company that serves approximately 11 million customers a week at more than 1,125 home improvement stores in 49 states. Based in Mooresville, N.C., the 59-year old company is the second-largest home improvement retailer in the world. For more information, visit Lowes.com.
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