LOWE’S REPORTS RECORD SECOND QUARTER EARNINGS
-- Second Quarter Comparable Store Sales Increased 3.3 Percent --
MOORESVILLE, N.C. - Lowe’s Companies, Inc. (NYSE: LOW), the world’s second largest home improvement retailer, today reported net earnings of $935 million for the quarter ended August 4, 2006, an 11.4 percent increase over the same period a year ago. Diluted earnings per share increased 15.4 percent to $0.60 from $0.52 in the second quarter of 2005. For the six months ended August 4, 2006, net earnings grew 24.6 percent to $1.78 billion while diluted earnings per share increased 27.0 percent to $1.13.
Sales for the quarter increased 12.2 percent to $13.4 billion, up from $11.9 billion in the second quarter of 2005. For the six months ended August 4, 2006, sales increased 15.9 percent to $25.3 billion. Total sales results were impacted by the calendar shift described in the business outlook section of this release. Comparable store sales for the second quarter increased 3.3 percent and increased 4.4 percent in the first half of 2006.
“I am proud of the Lowe’s team and the solid quarterly sales and earnings results delivered in a challenging economic environment,” explained Robert A. Niblock, Lowe’s chairman, president and CEO. “Despite a backdrop of higher energy costs and a tumultuous geo-political environment that has weighed on the consumer, the team remained focused on providing great customer service and compelling merchandise offerings. These efforts ensured Lowe’s continued to capture market share with notable gains in Flooring, Appliances, Outdoor Power Equipment and Cabinets and Countertops in the quarter, according to third-party estimates.
“We remain focused on strategies to grow our business, however near-term pressures on the U.S. consumer have led to a more cautious outlook for the balance of the year,” Niblock added. “As we enter the second half of 2006, we remain committed to providing the knowledgeable and attentive service customers have come to expect from Lowe’s while prudently managing expenses in the current sales environment.
“Expectations for an orderly slowdown in the housing market, moderate income growth and a solid employment picture are stabilizing forces for the consumer,” Niblock concluded. “I am confident the longer term drivers of our industry, including the required ongoing maintenance of the 124 million existing homes in the U.S., favorable demographics and solid household formation trends, combined with our customer focused culture, will ensure our continued success.”
During the quarter, Lowe’s opened 24 new stores including one relocation. As of August 4, 2006, Lowe’s operated 1,281 stores in 49 states representing 145.4 million square feet of retail selling space, a 12.4 percent increase over last year.
A conference call to discuss second quarter 2006 operating results is scheduled for today (Monday, August 21) 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 2006 Earnings Conference Call Webcast. A replay of the call will be archived on Lowes.com until November 19, 2006.
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 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, fuel and other energy costs, slower growth in personal income 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. For more information about these and other risks and uncertainties that we are exposed to, you should read the “Risk Factors” included in our Annual Report on Form 10-K to the United States Securities and Exchange Commission and the descriptions of any material changes in those “Risk Factors” included in our subsequent Quarterly Reports on Form 10-Q.
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.
