MOORESVILLE, NC - August 15, 2011 - Lowe’s Companies, Inc. (NYSE: LOW), the world’s second largest home improvement retailer, today reported net earnings of $830 million for the quarter ended July 29, 2011, essentially flat from the same period a year ago. Diluted earnings per share increased 10.3 percent to $0.64 from $0.58 in the second quarter of 2010. For the six months ended July 29, 2011, net earnings decreased 2.2 percent from the same period a year ago to $1.29 billion while diluted earnings per share increased 6.5 percent to $0.98.
Included in the above reported results, the company recognized a charge related to an evaluation of the carrying value of long-lived assets, including seven stores that closed on August 14, which reduced pre-tax earnings for the quarter by $83 million and diluted earnings per share by four cents ($0.04).
Sales for the quarter increased 1.3 percent to $14.5 billion, up from $14.4 billion in the second quarter of 2010. For the six months ended July 29, 2011, sales were $26.7 billion, essentially flat from the same period a year ago. Comparable store sales for the second quarter decreased 0.3 percent and for the first half of 2011 decreased 1.7 percent.
“Despite some recovery in our seasonal business, our performance for the quarter fell short of our expectations,” commented Robert A. Niblock, Lowe’s chairman, president and CEO. “We are working diligently to improve sales and profitability in the near-term in a way that we believe will generate sustained customer preference and shareholder value. We are also building momentum in 2011 behind our longer-term commitment to deliver even better customer experiences.
“I would like to thank our hard working employees for their ongoing dedication and customer focus. I am also pleased to announce that our Sanford, N.C. store, which was destroyed by a tornado on April 16, will reopen to continue serving the Sanford community on September 8,” Niblock added.
During the quarter, Lowe’s opened two stores. As of July 29, 2011, Lowe’s operated 1,753 stores in the United States, Canada and Mexico representing 197.6 million square feet of retail selling space, a 1.5 percent increase over last year.
A conference call to discuss second quarter 2011 operating results is scheduled for today (Monday, August 15) at 9:00 am ET. The conference call will be available through a webcast and can be accessed by visiting Lowe’s website at www.Lowes.com/investor and clicking on Lowe’s Second Quarter 2011 Earnings Conference Call Webcast. A replay of the call will be archived on Lowes.com until November 13, 2011.
Lowe’s Business Outlook
Third Quarter 2011 (comparisons to third quarter 2010)
Total sales are expected to increase approximately 2 percent
The company expects comparable store sales to be approximately flat
The company expects average square footage growth of approximately 1.3 percent
Earnings before interest and taxes as a percentage of sales (operating margin) are expected to decrease 10 to 20 basis points, which includes 20 to 30 basis points impact from additional expenses associated with seven stores that closed August 14
Depreciation expense is expected to be approximately $370 million
Diluted earnings per share of $0.30 to $0.33 are expected, which includes $0.01 to $0.02 per share impact from additional expenses associated with seven stores that closed August 14
Lowe’s third quarter ends on October 28, 2011 with operating results to be publicly released on Monday, November 14, 2011
Fiscal Year 2011 – a 53-week Year (comparisons to fiscal year 2010 – a 52-week year)
Total sales are expected to increase approximately 2 percent, including the 53rd week
The 53rd week is expected to increase total sales by approximately 1.4 percent
The company expects comparable store sales to decline approximately 1 percent
The company expects to open approximately 25 stores in 2011 reflecting average square footage growth of approximately 1.3 percent
Earnings before interest and taxes as a percentage of sales (operating margin) are expected to decrease approximately 30 basis points, which includes approximately 25 basis points impact from impairment and store closing costs
Depreciation expense is expected to be approximately $1.5 billion
Diluted earnings per share of $1.48 to $1.54 are expected for the fiscal year ending February 3, 2012, which includes approximately $0.06 per share impact from impairment and store closing costs
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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