LOWE’S REPORTS RECORD THIRD QUARTER EARNINGS
-- Third Quarter Total Sales Increased 16.9 Percent - -
-- Third Quarter Comparable Store Sales Increased 6.2 Percent --
MOORESVILLE, N.C. - Lowe’s Companies, Inc. (NYSE: LOW), the world’s second largest home improvement retailer, today reported net earnings of $649 million for the quarter ended October 28, 2005, a 25.8 percent increase over the same period a year ago. Diluted earnings per share increased 24.6 percent to $0.81 from $0.65 in the third quarter of 2004. For the nine months ended October 28, 2005, net earnings grew 24.5 percent to $2.08 billion while diluted earnings per share increased 24.5 percent to $2.59.
Sales for the quarter increased 16.9 percent to $10.6 billion, up from $9.1 billion in the third quarter of 2004. Comparable store sales for the third quarter increased 6.2 percent. For the nine months ended October 28, 2005, sales increased 16.2 percent to $32.4 billion. Comparable store sales increased 5.5 percent in the first nine months of 2005.
“Our performance, highlighted by positive comparable store sales in all of our 20 product categories and 19 of our 21 geographic regions, is a clear indication that consumers continue to invest in products and projects to maintain, enhance and improve their homes even in light of concerns about the impact of rising gasoline and home heating costs,” explained Robert A. Niblock, Lowe’s chairman, president and CEO. “Continued investments in our business coupled with our culture of customer service have strengthened our competitive position, and we’re confident Lowe’s has the flexibility to adapt to changes in the marketplace to continue to deliver solid results.”
“Our employees provided exceptional service in a quarter marked by the distractions of three major hurricanes,” Niblock added. “Our focus on serving our customers’ needs with innovative and differentiated products and services allows us to continue to capture market share in a fragmented home improvement industry.”
During the quarter, Lowe’s opened 33 new stores and temporarily closed one store impacted by hurricane Katrina. As of October 28, 2005, Lowe’s operated 1,170 stores in 49 states representing 133.0 million square feet of retail selling space, a 13.1 percent increase over last year.
A conference call to discuss third quarter 2005 operating results is scheduled for today (Monday, November 14) 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 the icon for the Lowe’s Third Quarter 2005 Earnings Conference Call Webcast. A replay of the call will be archived on Lowes.com/investor until February 26, 2006.
Fourth Quarter 2005 - a 14-week Quarter(comparisons to fourth quarter 2004 - a 13-week quarter)
| · | The company expects to open 63 new stores and reopen one store that was temporarily closed following hurricane Katrina reflecting square footage growth of approximately 13 percent |
| · | Total sales are expected to increase approximately 22 percent |
| · | The company expects to report a comparable store sales increase of 4 to 6 percent (14 weeks vs. a comparable 14 weeks) |
| · | Operating margin (defined as gross margin less SG&A and depreciation) is expected to decline approximately 20 basis points |
| · | Store opening costs are expected to be approximately $50 million |
| · | Diluted earnings per share of $0.77 to $0.80 are expected |
| · | Lowe’s fourth quarter ends on February 3, 2006 with operating results to be publicly released on Monday, February 27, 2006 |
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 17 to 18 percent for the year |
| · | The company expects to report a comparable store sales increase of 5 to 6 percent |
| · | Operating margin (defined as gross margin less SG&A and depreciation) is expected to increase approximately 40 basis points |
| · | Store opening costs are expected to be approximately $134 million |
| · | Diluted earnings per share of $3.37 to $3.40 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, changes in general economic conditions, such as interest rate and currency fluctuations, rising fuel costs, 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. Additional information regarding the risks and uncertainties which may affect our operations and economic results can be found in our 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 1,150 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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