— Consolidated Comparable Sales Decreased
0.3%; U.S. Comparable Sales Increased 0.2% —
— Second
Quarter Diluted EPS of $4.67
—
MOORESVILLE, N.C., Aug. 17,
2022 /PRNewswire/ -- Lowe's Companies, Inc. (NYSE:
LOW) today reported net earnings of $3.0
billion, in line with prior-year results, and diluted
earnings per share (EPS) of $4.67 for
the quarter ended July 29, 2022,
compared to diluted EPS of $4.25 in
the second quarter of 2021.
Total sales for the second quarter were $27.5 billion compared to $27.6 billion in the second quarter of 2021, and
comparable sales decreased 0.3%. Comparable sales for the U.S. home
improvement business increased 0.2% for the second quarter. DIY
sales were impacted by the shortened spring and lower demand in
certain discretionary categories, which was partially offset by a
13% increase in Pro customer sales.
"I am pleased that our team drove operating margin improvement
and effectively managed inventory despite lower-than-expected sales
– a clear reflection of our relentless focus on operating
discipline and productivity," commented Marvin R. Ellison, Lowe's chairman, president
and CEO. "Our results in the first half were disproportionately
impacted by our 75% DIY customer mix, which was partially offset by
our double-digit Pro growth for the ninth consecutive
quarter. Despite continued macro uncertainty, we remain
confident in the long-term strength of the home improvement market
and our ability to take share. To help our hourly front-line
associates during this period of high inflation, we are awarding an
incremental bonus of $55 million. I'd
like to thank our associates for their continued hard work and
dedication."
Capital Allocation
With a disciplined focus on its
best-in-class capital allocation program, the company continues to
create sustainable value for its shareholders. During the quarter,
the company repurchased approximately 21.6 million shares for
$4.0 billion, and it paid
$524 million in dividends.
As of July 29, 2022, Lowe's operated 1,969 home
improvement and hardware stores in the U.S. and Canada representing 208 million square feet of
retail selling space, and it serviced approximately
212 dealer-owned stores.
The company now expects full year 2022 total and comparable
sales toward the bottom end of its outlook range, and expects
operating income and diluted EPS toward the top end of its outlook
range. This reflects first half sales performance and expectations
for continued Pro strength and improving DIY trends. It also
reflects the company's disciplined expense management and benefits
of its productivity initiatives.
Full Year 2022 Outlook -- a 53-week Year (comparisons to full
year 2021 -- a 52-week year)
- Total sales of $97 billion to
$99 billion, including the 53rd
week
- 53rd week expected to increase total sales by approximately
$1.0 billion to $1.5 billion
- Comparable sales expected to range from a decline of -1% to an
increase of 1%
- Gross margin rate up slightly compared to prior year
- Depreciation and amortization of approximately $1.75 billion
- Operating income as a percentage of sales (operating margin) of
12.8% to 13.0%
- Interest expense of $1.1 to
$1.2 billion (previously $1.0 to $1.1
billion)
- Effective income tax rate of approximately 25%
- Diluted earnings per share of $13.10 to $13.60
- Total share repurchases of approximately $12 billion
- ROIC1 of over 36%
- Capital expenditures of approximately $2
billion
A conference call to discuss second quarter 2022 operating
results is scheduled for today, Wednesday, August 17, at
9 a.m. ET. The conference call will
be available by webcast and can be accessed by visiting Lowe's
website at ir.lowes.com and clicking on Lowe's Second Quarter 2022
Earnings Conference Call Webcast. Supplemental slides will be
available approximately 15 minutes prior to the start of the
conference call. A replay of the call will be archived at
ir.lowes.com.
Lowe's Companies, Inc. (NYSE: LOW) is a FORTUNE® 50 home
improvement company serving approximately 19 million customer
transactions a week in the United
States and Canada. With
fiscal year 2021 sales of over $96
billion, Lowe's and its related businesses operate or
service nearly 2,200 home improvement and hardware stores and
employ over 300,000 associates. Based in Mooresville, N.C., Lowe's supports the
communities it serves through programs focused on creating safe,
affordable housing and helping to develop the next generation of
skilled trade experts. For more information, visit Lowes.com.
Disclosure Regarding
Forward-Looking Statements
|
This press release includes "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. Statements including words such as "believe", "expect",
"anticipate", "plan", "desire", "project", "estimate", "intend",
"will", "should", "could", "would", "may", "strategy", "potential",
"opportunity", "outlook", "scenario", "guidance", and similar
expressions are forward-looking statements. Forward-looking
statements involve, among other things, expectations, projections,
and assumptions about future financial and operating results,
objectives, business outlook, priorities, sales growth, shareholder
value, capital expenditures, cash flows, the housing market, the
home improvement industry, demand for products and services, share
repurchases, Lowe's strategic initiatives, including those relating
to acquisitions and dispositions and the impact of such
transactions on our strategic and operational plans and financial
results. Such statements involve risks and uncertainties and
we can give no assurance that they will prove to be correct.
Actual results may differ materially from those expressed or
implied in such statements.
A wide variety of potential risks, uncertainties, and other
factors could materially affect our ability to achieve the results
either expressed or implied by these forward-looking statements
including, but not limited to, changes in general economic
conditions, such as volatility and/or lack of liquidity from time
to time in U.S. and world financial markets and the consequent
reduced availability and/or higher cost of borrowing to Lowe's and
its customers, slower rates of growth in real disposable personal
income that could affect the rate of growth in consumer spending,
inflation and its impacts on discretionary spending and on our
costs, shortages, and other disruptions in the labor supply,
interest rate and currency fluctuations, home price appreciation or
decreasing housing turnover, the availability of consumer credit
and of mortgage financing, trade policy changes or additional
tariffs, outbreaks of pandemics, fluctuations in fuel and energy
costs, inflation or deflation of commodity prices, natural
disasters, armed conflicts, acts of both domestic and international
terrorism, and other factors that can negatively affect our
customers.
Investors and others should carefully consider the foregoing
factors and other uncertainties, risks and potential events
including, but not limited to, those described in "Item 1A - Risk
Factors" in our most recent Annual Report on Form 10-K and as may
be updated from time to time in Item 1A in our quarterly reports on
Form 10-Q or other subsequent filings with the SEC. All such
forward-looking statements speak only as of the date they are made,
and we do not undertake any obligation to update these statements
other than as required by law.
LOW-IR
Contacts:
|
Shareholder/Analyst
Inquiries:
|
|
Media
Inquiries:
|
|
Kate
Pearlman
|
|
Steve
Salazar
|
|
704-775-3856
|
|
704-881-4272
|
|
kate.pearlman@lowes.com
|
|
steve.j.salazar@lowes.com
|
1 Return on Invested Capital (ROIC) is calculated
using a non-GAAP financial measure. The Company does not provide a
reconciliation for non-GAAP estimates on a forward-looking basis
where it is unable to provide a meaningful or accurate calculation
or estimation of reconciling items and the information is not
available without unreasonable effort.
Lowe's Companies,
Inc. Consolidated Statements of Current Earnings and
(Accumulated Deficit)/Retained Earnings (Unaudited) In
Millions, Except Per Share and Percentage Data
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
July 29,
2022
|
|
July 30,
2021
|
|
July 29,
2022
|
|
July 30,
2021
|
Current
Earnings
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
Net
sales
|
$
27,476
|
|
100.00
|
|
$
27,570
|
|
100.00
|
|
$
51,135
|
|
100.00
|
|
$
51,993
|
|
100.00
|
Cost of
sales
|
18,343
|
|
66.76
|
|
18,258
|
|
66.22
|
|
33,952
|
|
66.40
|
|
34,551
|
|
66.45
|
Gross
margin
|
9,133
|
|
33.24
|
|
9,312
|
|
33.78
|
|
17,183
|
|
33.60
|
|
17,442
|
|
33.55
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
4,455
|
|
16.22
|
|
4,693
|
|
17.02
|
|
8,758
|
|
17.12
|
|
9,187
|
|
17.67
|
Depreciation and
amortization
|
449
|
|
1.63
|
|
409
|
|
1.49
|
|
894
|
|
1.75
|
|
800
|
|
1.54
|
Operating
income
|
4,229
|
|
15.39
|
|
4,210
|
|
15.27
|
|
7,531
|
|
14.73
|
|
7,455
|
|
14.34
|
Interest –
net
|
264
|
|
0.96
|
|
216
|
|
0.78
|
|
507
|
|
0.99
|
|
427
|
|
0.82
|
Pre-tax
earnings
|
3,965
|
|
14.43
|
|
3,994
|
|
14.49
|
|
7,024
|
|
13.74
|
|
7,028
|
|
13.52
|
Income tax
provision
|
973
|
|
3.54
|
|
976
|
|
3.54
|
|
1,699
|
|
3.33
|
|
1,688
|
|
3.25
|
Net
earnings
|
$
2,992
|
|
10.89
|
|
$
3,018
|
|
10.95
|
|
$
5,325
|
|
10.41
|
|
$
5,340
|
|
10.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding –
basic
|
638
|
|
|
|
705
|
|
|
|
649
|
|
|
|
711
|
|
|
Basic earnings per
common share (1)
|
$
4.68
|
|
|
|
$
4.27
|
|
|
|
$
8.18
|
|
|
|
$
7.48
|
|
|
Weighted average common
shares outstanding –
diluted
|
639
|
|
|
|
707
|
|
|
|
651
|
|
|
|
713
|
|
|
Diluted earnings per
common share (1)
|
$
4.67
|
|
|
|
$
4.25
|
|
|
|
$
8.16
|
|
|
|
$
7.46
|
|
|
Cash dividends per
share
|
$
1.05
|
|
|
|
$
0.80
|
|
|
|
$
1.85
|
|
|
|
$
1.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Accumulated
Deficit)/Retained Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning
of period
|
$
(7,367)
|
|
|
|
$
98
|
|
|
|
$
(5,115)
|
|
|
|
$
1,117
|
|
|
Net earnings
|
2,992
|
|
|
|
3,018
|
|
|
|
5,325
|
|
|
|
5,340
|
|
|
Cash dividends
declared
|
(666)
|
|
|
|
(563)
|
|
|
|
(1,190)
|
|
|
|
(993)
|
|
|
Share
repurchases
|
(3,854)
|
|
|
|
(3,013)
|
|
|
|
(7,915)
|
|
|
|
(5,924)
|
|
|
Balance at end of
period
|
$
(8,895)
|
|
|
|
$
(460)
|
|
|
|
$
(8,895)
|
|
|
|
$
(460)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Under the two-class
method, earnings per share is calculated using net earnings
allocable to common shares, which is derived by reducing
net earnings by the earnings allocable to participating
securities. Net earnings allocable to common shares used in
the basic and diluted
earnings per share calculation were $2,983 million for the three
months ended July 29, 2022, and $3,007 million for the three
months ended
July 30, 2021. Net earnings allocable to common shares
used in the basic and diluted earnings per share calculation were
$5,308 million
for the six months ended July 29, 2022, and $5,318 million for
the six months ended July 30, 2021.
|
Lowe's Companies,
Inc. Consolidated Statements of Comprehensive Income
(Unaudited) In Millions, Except Percentage Data
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
July 29,
2022
|
|
July 30,
2021
|
|
July 29,
2022
|
|
July 30,
2021
|
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
Net
earnings
|
$
2,992
|
|
10.89
|
|
$
3,018
|
|
10.95
|
|
$
5,325
|
|
10.41
|
|
$
5,340
|
|
10.27
|
Foreign currency
translation adjustments – net
of tax
|
12
|
|
0.05
|
|
(44)
|
|
(0.17)
|
|
(5)
|
|
(0.02)
|
|
58
|
|
0.11
|
Cash flow hedges – net
of tax
|
(38)
|
|
(0.14)
|
|
(9)
|
|
(0.03)
|
|
181
|
|
0.36
|
|
15
|
|
0.03
|
Other
|
(1)
|
|
—
|
|
(1)
|
|
—
|
|
(3)
|
|
0.01
|
|
(2)
|
|
—
|
Other comprehensive
(loss)/income
|
(27)
|
|
(0.09)
|
|
(54)
|
|
(0.20)
|
|
173
|
|
0.35
|
|
71
|
|
0.14
|
Comprehensive
income
|
$
2,965
|
|
10.80
|
|
$
2,964
|
|
10.75
|
|
$
5,498
|
|
10.76
|
|
$
5,411
|
|
10.41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lowe's Companies,
Inc. Consolidated Balance Sheets (Unaudited) In
Millions, Except Par Value Data
|
|
|
|
July 29,
2022
|
|
July 30,
2021
|
|
January 28,
2022
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
1,482
|
|
$
4,835
|
|
$
1,133
|
Short-term
investments
|
|
450
|
|
1,420
|
|
271
|
Merchandise inventory
– net
|
|
19,329
|
|
17,322
|
|
17,605
|
Other current
assets
|
|
1,406
|
|
1,506
|
|
1,051
|
Total current
assets
|
|
22,667
|
|
25,083
|
|
20,060
|
Property, less
accumulated depreciation
|
|
18,713
|
|
19,031
|
|
19,071
|
Operating lease
right-of-use assets
|
|
4,158
|
|
3,820
|
|
4,108
|
Long-term
investments
|
|
56
|
|
225
|
|
199
|
Deferred income taxes
– net
|
|
104
|
|
221
|
|
164
|
Other
assets
|
|
1,027
|
|
1,024
|
|
1,038
|
Total
assets
|
|
$
46,725
|
|
$
49,404
|
|
$
44,640
|
|
|
|
|
|
|
|
Liabilities and
shareholders' deficit
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
—
|
|
$
1,000
|
|
$
—
|
Current maturities of
long-term debt
|
|
121
|
|
1,344
|
|
868
|
Current operating
lease liabilities
|
|
652
|
|
557
|
|
636
|
Accounts
payable
|
|
12,631
|
|
12,011
|
|
11,354
|
Accrued compensation
and employee benefits
|
|
1,227
|
|
1,331
|
|
1,561
|
Deferred
revenue
|
|
1,968
|
|
2,041
|
|
1,914
|
Other current
liabilities
|
|
3,767
|
|
3,380
|
|
3,335
|
Total current
liabilities
|
|
20,366
|
|
21,664
|
|
19,668
|
Long-term debt,
excluding current maturities
|
|
28,763
|
|
21,967
|
|
23,859
|
Noncurrent operating
lease liabilities
|
|
4,069
|
|
3,841
|
|
4,021
|
Deferred revenue –
Lowe's protection plans
|
|
1,169
|
|
1,097
|
|
1,127
|
Other
liabilities
|
|
800
|
|
1,010
|
|
781
|
Total
liabilities
|
|
55,167
|
|
49,579
|
|
49,456
|
|
|
|
|
|
|
|
Shareholders'
deficit:
|
|
|
|
|
|
|
Preferred stock, $5 par
value: Authorized – 5.0 million shares; Issued and
outstanding – none
|
|
—
|
|
—
|
|
—
|
Common stock, $0.50 par
value: Authorized – 5.6 billion shares; Issued
and outstanding – 631 million, 699 million, and
670 million shares,
respectively
|
|
316
|
|
350
|
|
335
|
Capital in excess of
par value
|
|
—
|
|
—
|
|
—
|
Accumulated
deficit
|
|
(8,895)
|
|
(460)
|
|
(5,115)
|
Accumulated other
comprehensive income/(loss)
|
|
137
|
|
(65)
|
|
(36)
|
Total shareholders'
deficit
|
|
(8,442)
|
|
(175)
|
|
(4,816)
|
Total liabilities
and shareholders' deficit
|
|
$
46,725
|
|
$
49,404
|
|
$
44,640
|
|
|
|
|
|
|
|
Lowe's Companies,
Inc. Consolidated Statements of Cash Flows
(Unaudited) In Millions
|
|
|
Six Months
Ended
|
|
July 29,
2022
|
|
July 30,
2021
|
Cash flows from
operating activities:
|
|
|
|
Net earnings
|
$
5,325
|
|
$
5,340
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
1,007
|
|
907
|
Noncash lease
expense
|
273
|
|
252
|
Deferred income
taxes
|
—
|
|
110
|
Loss on property and
other assets – net
|
32
|
|
1
|
Share-based payment
expense
|
110
|
|
115
|
Changes in operating
assets and liabilities:
|
|
|
|
Merchandise inventory
– net
|
(1,728)
|
|
(1,096)
|
Other operating
assets
|
(120)
|
|
(203)
|
Accounts
payable
|
1,279
|
|
1,115
|
Deferred
revenue
|
97
|
|
511
|
Other operating
liabilities
|
(263)
|
|
(139)
|
Net cash provided by
operating activities
|
6,012
|
|
6,913
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Purchases of
investments
|
(330)
|
|
(1,635)
|
Proceeds from
sale/maturity of investments
|
290
|
|
692
|
Capital
expenditures
|
(687)
|
|
(846)
|
Proceeds from sale of
property and other long-term assets
|
19
|
|
78
|
Other – net
|
(1)
|
|
(134)
|
Net cash used in
investing activities
|
(709)
|
|
(1,845)
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Net proceeds from
issuance of debt
|
4,964
|
|
2,988
|
Repayment of
debt
|
(799)
|
|
(568)
|
Proceeds from issuance
of common stock under share-based payment plans
|
72
|
|
63
|
Cash dividend
payments
|
(1,061)
|
|
(870)
|
Repurchases of common
stock
|
(8,128)
|
|
(6,174)
|
Other – net
|
(2)
|
|
(366)
|
Net cash used in
financing activities
|
(4,954)
|
|
(4,927)
|
|
|
|
|
Effect of exchange
rate changes on cash
|
—
|
|
4
|
|
|
|
|
Net increase in cash
and cash equivalents
|
349
|
|
145
|
Cash and cash
equivalents, beginning of period
|
1,133
|
|
4,690
|
Cash and cash
equivalents, end of period
|
$
1,482
|
|
$
4,835
|
|
|
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/lowes-reports-second-quarter-2022-sales-and-earnings-results-301607202.html
SOURCE Lowe's Companies, Inc.