MOORESVILLE, N.C. - Lowe's Companies, Inc. (NYSE: LOW), the world's second largest home improvement retailer, today reported net earnings of $225 million for the quarter ended October 28, 2011, a 44.3 percent decline from the same period a year ago.
Diluted earnings per share decreased 37.9 percent to $0.18 from $0.29 in the third quarter of 2010. For the nine months ended October 28, 2011, net earnings decreased 12.1 percent from the same period a year ago to $1.52 billion while diluted earnings per share decreased 3.3 percent to $1.17.
Included in the above reported results are charges related to store closings and discontinued projects which, in the aggregate, reduced pre-tax earnings for the quarter by $336 million and diluted earnings per share by $0.17.
Sales for the quarter increased 2.3 percent to $11.9 billion, up from $11.6 billion in the third quarter of 2010. For the nine months ended October 28, 2011, sales were $38.6 billion, an increase of 0.6 percent from the same period a year ago. Comparable store sales for the third quarter increased 0.7 percent and for the first nine months of 2011 decreased 1.0 percent.
"Our performance is not at the level we expect relative to the market," commented Robert A. Niblock, Lowe's chairman, president and CEO. "We are making the changes necessary to right size the organization, improve speed to market and enhance the shopping experience. We are keenly focused on improving our core business while also developing new capabilities and services for the future. I am confident we are moving forward on a clear path that is not dependent on an unlikely near-term economic recovery.
"I would like to thank our hard-working employees for their ongoing dedication and customer focus during a time of significant change," Niblock added.
During the quarter, Lowe's opened eight stores. As of October 28, 2011, Lowe's operated 1,744 stores in the United States, Canada and Mexico representing 196.5 million square feet of retail selling space, a 0.5 percent increase over last year.
Lowe's Business Outlook
Fourth Quarter 2011 - a 14-week Quarter (comparisons to fourth quarter 2010 - a 13-week quarter)
Total sales are expected to increase approximately 8 percent, including the 14th week
The 14th week is expected to increase total sales by approximately 7 percent
The company expects comparable store sales of flat to 1 percent
Earnings before interest and taxes as a percentage of sales (operating margin) are expected to decrease approximately 50 basis points, which includes approximately 10 basis points impact from additional expenses associated with previously announced store closings
Depreciation expense is expected to be approximately $370 million
Diluted earnings per share of $0.20 to $0.23 are expected
Lowe's fourth quarter ends on February 3, 2012 with operating results to be publicly released on Monday, February 27, 2012
Fiscal Year 2011 - a 53-week Year (comparisons to fiscal year 2010 - a 52-week year)
Total sales are expected to increase 2 to 3 percent, including the 53rd week
The 53rd week is expected to increase total sales by approximately 1.5 percent
The company expects comparable store sales to decline approximately 1 percent
The company expects to open approximately 25 stores in 2011
Earnings before interest and taxes as a percentage of sales (operating margin) are expected to decrease 80 to 90 basis points, which includes approximately 80 basis points impact from charges associated with store closings and discontinued projects
Depreciation expense is expected to be approximately $1.5 billion
Diluted earnings per share of $1.37 to $1.40 are expected for the fiscal year ending February 3, 2012, which includes approximately $0.20 per share impact from charges associated with store closings and discontinued projects
With fiscal year 2010 sales of $48.8 billion, Lowe's Companies, Inc. is a FORTUNE® 50 company that serves approximately 15 million customers a week at more than 1,725 home improvement stores in the United States, Canada and Mexico. Founded in 1946 and based in Mooresville, N.C., Lowe's is the second-largest home improvement retailer in the world. For more information, visit Lowes.com.
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