MOORESVILLE, N.C., May 20, 2020 /PRNewswire/ -- Lowe's
Companies, Inc. (NYSE: LOW) today reported net earnings of
$1.3 billion and diluted earnings per
share (EPS) of $1.76 for the quarter
ended May 1, 2020, compared to a net
earnings of $1.0 billion and diluted
EPS of $1.31 in the first quarter of
2019. First quarter adjusted diluted EPS of $1.77 was 45 percent higher than adjusted diluted
EPS of $1.22 in the first quarter of
20191.
Sales for the first quarter were $19.7
billion compared to $17.7
billion in the first quarter of 2019, and comparable sales
increased 11.2 percent. Comparable sales for the U.S. home
improvement business increased 12.3 percent for the first
quarter.
"In late February, we shifted our priorities in response to the
COVID-19 pandemic, and immediately focused on how best to serve the
needs of our communities during this unprecedented time. Our
highest priority remains the health and safety of our associates
and community, and we have demonstrated that commitment in the
first quarter through an investment of $340
million, including support for healthcare workers and first
responders," commented Marvin R.
Ellison, Lowe's president and CEO.
"We also enhanced the safety of our operations by shortening our
store operating hours in early March, so we could increase cleaning
protocols and restock shelves. And during the hours that our
stores were open, we implemented significant operational changes to
best facilitate social distancing," added Mr. Ellison.
"I am tremendously proud of our associates and how they rose to
meet the challenges of this global health crisis, and have
continued to serve their communities, providing our customers with
the essential products and services they need to keep their homes
safe and functional, and their businesses running."
"Our strong first quarter performance, which continues into May,
also reflects the benefits of our retail fundamentals strategy, the
improvement in our execution, and the resiliency of our home
improvement business model. I am also pleased with our
ability to pivot to serve increased online demand with Lowes.com
sales increasing 80% in the quarter," concluded Ellison. "To
assist other retailers in operating safely in this exceptionally
challenging environment, we shared our best practices with the
Retail Industry Leaders Association and any other retailer who is
interested."
1 Adjusted diluted earnings per share is a
non-GAAP financial measure. Refer to the "Non-GAAP Financial
Measures Reconciliation" section of this release for additional
information as well as reconciliations between the Company's GAAP
and non-GAAP financial results.
COVID-19 Response to Date
Support for Associates
- Made two special payments of $300
for full-time hourly associates and $150 for part-time hourly associates to help with
unexpected expenses, totaling approximately $145 million
- Increased pay by $2 per hour for
the month of April for front-line associates
- Recognized $87 million in
'Winning Together' profit-sharing bonuses to front-line associates,
which includes an incremental $24
million payment based on above-target store performance
- Offered 14 days of emergency paid leave for all associates who
needed it
- Offered up to four weeks of emergency paid leave for those at
higher risk for severe illness from COVID-19
- Closed all stores on Easter
Sunday, to provide associates time off to recharge with
their families
- Offered telemedicine benefits to all associates and their
families, even if they are not enrolled in Lowe's medical
plans
- Provided two extra weeks of paid vacation to salaried
front-line managers
- Made incremental donation to Lowe's Employee Relief Fund
- Provided face masks and gloves to all associates
- Stocked in-store food pantries so associates have easier access
to food during work and to take home
- Launched Command Center as a single point-of-contact for store
operations
- Implemented remote working for store support center
associates
Support for Customers
- Optimized store hours by closing 3 hours early every day to
increase third-party cleaning routines and restock shelves, while
also providing enough operating hours during the day to minimize
concentrations of customer traffic
- Increased third-party cleaning services and enhanced cleaning
during operating hours throughout the day
- Provided hand sanitizing stations in areas throughout the
store, including entrances and exits
- Added social distancing ambassadors to manage customer traffic
flow and monitor store traffic to limit customers based on store
footprint, in line with regulatory requirements
- Encouraged social distancing through new signage, including
floor markers, directional traffic arrows and overhead
announcements
- Installed plexiglass shields at all point-of-sale
registers
- Made substantial updates to store floor layouts to further
support social distancing, such as opening up aisle space by
removing displays and shelving and setting up one-way traffic flows
in higher-traffic areas
- Launched curbside pickup, so customers can be served without
coming inside the store
- Changed delivery procedures to safeguard customer and associate
health, including by leaving items outside. Provided delivery
drivers with face masks and gloves, as well as additional
training.
Support for Communities
- Hired more than 100,000 front-line associates for spring
season
- Committed $50 million in
charitable contributions, to support our communities in their
pandemic response, which includes a $10
million donation in essential protective products for
medical workers
- Donated all available respirators to the country's two largest
healthcare distribution organizations
- Empowered all Lowe's stores to donate products to local
hospitals and first responders in their communities to serve short
and long-term needs
- Donated $1 million worth of
flower baskets for Mother's Day from its network of small business
growers and nurseries and gave them to more than 10,000 mothers in
senior living facilities
- Supported communities through longstanding nonprofit
partnerships, including Habitat for Humanity, Boys & Girls
Clubs, Building Homes for Heroes, USO, American Red Cross,
SkillsUSA and Reach Out Worldwide
Capital Allocation
Given the uncertain economic
outlook, the Company raised $4
billion in senior unsecured notes, and increased the
capacity of its revolving credit facilities by $770 million. After repaying $500 million of fixed rate notes due April 15, 2020, the Company now has $6.0 billion of cash and cash equivalents as well
as $3 billion in undrawn capacity on
its revolving credit facilities which will be available for any
unanticipated liquidity needs.
During the quarter, the Company also decided to suspend share
repurchases, and does not expect to repurchase any more shares this
year beyond what was executed in the first quarter. The
Company repurchased 9.6 million shares for $947 million under its share repurchase program,
and paid $420 million in dividends in
the first quarter.
As of May 1, 2020, Lowe's operated
1,970 home improvement and hardware stores in the United States and Canada representing 207.8 million square feet
of retail selling space.
A conference call to discuss first quarter 2020 operating
results is scheduled for today, Wednesday,
May 20, at 9:00 am ET.
The conference call will be available by webcast and can be
accessed by visiting Lowe's website at www.Lowes.com/investor and
clicking on Lowe's First Quarter 2020 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 on Lowes.com/investor.
Lowe's Business Outlook
The Company is withdrawing its
financial guidance for fiscal year 2020. The Company
delivered strong financial performance in the first quarter, with
continued sales momentum in May. However, there is limited
visibility into future business trends in this unprecedented
operating environment, which results in an unusually wide range of
potential outcomes for 2020 financial performance.
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" and similar expressions are forward-looking
statements. Forward-looking statements involve estimates,
expectations, projections, goals, forecasts, assumptions, risks and
uncertainties. Forward-looking statements include, but are
not limited to, statements about future financial and operating
results, Lowe's plans, objectives, business outlook, priorities,
expectations and intentions, expectations for sales growth,
comparable sales, earnings and performance, shareholder value,
capital expenditures, cash flows, the housing market, the home
improvement industry, demand for services, share repurchases,
Lowe's strategic initiatives, including those relating to
acquisitions and dispositions by Lowe's and the expected impact of
such transactions on our strategic and operational plans and
financial results, and any statement of an assumption underlying
any of the foregoing and other statements that are not historical
facts. Although we believe that the expectations, opinions,
projections and comments reflected in these forward-looking
statements are reasonable, such statements involve risks and
uncertainties and we can give no assurance that such statements
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 the rate of unemployment, interest rate and
currency fluctuations, fuel and other energy costs, slower growth
in personal income, changes in consumer spending, changes in the
rate of housing turnover, the availability of consumer credit and
of mortgage financing, inflation or deflation of commodity prices,
recently enacted, proposed or threatened tariffs, and
disruptions caused by our recent management and key personnel
changes, and other factors that can negatively affect our
customers, as well as our ability to: (i) respond to adverse trends
in the housing industry, a reduced rate of growth in household
formation, and slower rates of growth in housing renovation and
repair activity, as well as uneven recovery in commercial building
activity; (ii) secure, develop, and otherwise implement new
technologies and processes necessary to realize the benefits of our
strategic initiatives focused on omni-channel sales and marketing
presence and enhance our efficiency, and otherwise successfully
execute on our strategy and implement our strategic initiatives,
including acquisitions, dispositions and the closing of certain
stores and facilities; (iii) attract, train, and retain
highly-qualified associates; (iv) manage our business effectively
as we adapt our operating model to meet the changing expectations
of our customers; (v) maintain, improve, upgrade and protect our
critical information systems from system outages, data security
breaches, ransomware and other cyber threats; (vi) respond to
fluctuations in the prices and availability of services, supplies,
and products; (vii) respond to the growth and impact of
competition; (viii) address changes in existing or new laws or
regulations that affect consumer credit, employment/labor, trade,
product safety, transportation/logistics, energy costs, health
care, tax, environmental issues or privacy and data protection;
(ix) positively and effectively manage our public image and
reputation and respond appropriately to unanticipated failures to
maintain a high level of product and service quality that could
result in a negative impact on customer confidence and adversely
affect sales; (x) effectively manage our relationships with
selected suppliers of brand name products and key vendors and
service providers, including third party installers; and (xi)
respond successfully to the challenges presented by the coronavirus
pandemic and its economic effects. In addition, we could experience
impairment losses and other charges if either the actual results of
our operating stores are not consistent with the assumptions and
judgments we have made in estimating future cash flows and
determining asset fair values, or we are required to reduce the
carrying amount of our investment in certain unconsolidated
entities. With respect to acquisitions and dispositions, potential
risks include the effect of such transactions on Lowe's and the
target company's or operating business's strategic relationships,
operating results and businesses generally; our ability to
integrate or divest personnel, labor models, financial, IT and
other systems successfully; disruption of our ongoing business and
distraction of management; hiring additional management and other
critical personnel; increasing or decreasing the scope, geographic
diversity and complexity of our operations; significant integration
or disposition costs or unknown liabilities; and failure to realize
the expected benefits of the transaction. For more information
about these and other risks and uncertainties that we are exposed
to, you should read the "Risk Factors" and "Management's Discussion
and Analysis of Financial Condition and Results of
Operations—Critical Accounting Policies and Estimates" included in
our most recent Annual Report on Form 10-K filed with the U.S.
Securities and Exchange Commission (the "SEC") and the description
of material changes thereto, if any, included in our Quarterly
Reports on Form 10-Q or subsequent filings with the SEC.
The forward-looking statements contained in this news release
are expressly qualified in their entirety by the foregoing
cautionary statements. The foregoing list of important factors that
may affect future results is not exhaustive. When relying on
forward-looking statements to make decisions, investors and others
should carefully consider the foregoing factors and other
uncertainties and potential events. All such forward-looking
statements are based upon data available as of the date of this
release or other specified date and speak only as of such date. All
subsequent written and oral forward-looking statements attributable
to us or any person acting on our behalf about any of the matters
covered in this release are qualified by these cautionary
statements and in the "Risk Factors" included in our most recent
Annual Report on Form 10-K and the description of material changes
thereto, if any, included in our Quarterly Reports on Form 10-Q or
subsequent filings with the SEC. We expressly disclaim any
obligation to update or revise any forward-looking statement,
whether as a result of new information, change in circumstances,
future events or otherwise, except as may be required by law.
Lowe's Companies, Inc.
Lowe's Companies, Inc. (NYSE:
LOW) is a FORTUNE® 50 home improvement company serving
approximately 18 million customers a week in the United States and Canada. With fiscal year 2019 sales of
$72.1 billion, Lowe's and its related
businesses operate or service more than 2,200 home improvement and
hardware stores and employ approximately 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.
Lowe's Companies,
Inc.
Consolidated
Statements of Current and Retained Earnings
(Unaudited)
In Millions, Except
Per Share and Percentage Data
|
|
|
Three Months
Ended
|
|
May 1,
2020
|
|
May 3,
2019
|
Current
Earnings
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
Net
sales
|
$
|
19,675
|
|
|
100.00
|
|
|
$
|
17,741
|
|
|
100.00
|
|
Cost of
sales
|
13,162
|
|
|
66.90
|
|
|
12,160
|
|
|
68.54
|
|
Gross
margin
|
6,513
|
|
|
33.10
|
|
|
5,581
|
|
|
31.46
|
|
Expenses:
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
4,196
|
|
|
21.32
|
|
|
3,862
|
|
|
21.77
|
|
Depreciation and
amortization
|
326
|
|
|
1.66
|
|
|
302
|
|
|
1.70
|
|
Operating
income
|
1,991
|
|
|
10.12
|
|
|
1,417
|
|
|
7.99
|
|
Interest –
net
|
205
|
|
|
1.04
|
|
|
162
|
|
|
0.92
|
|
Pre-tax
earnings
|
1,786
|
|
|
9.08
|
|
|
1,255
|
|
|
7.07
|
|
Income tax
provision
|
449
|
|
|
2.28
|
|
|
209
|
|
|
1.17
|
|
Net
earnings
|
$
|
1,337
|
|
|
6.80
|
|
|
$
|
1,046
|
|
|
5.90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding – basic
|
755
|
|
|
|
|
796
|
|
|
|
Basic earnings per
common share (1)
|
$
|
1.76
|
|
|
|
|
$
|
1.31
|
|
|
|
Weighted average
common shares outstanding – diluted
|
756
|
|
|
|
|
797
|
|
|
|
Diluted earnings
per common share (1)
|
$
|
1.76
|
|
|
|
|
$
|
1.31
|
|
|
|
Cash dividends per
share
|
$
|
0.55
|
|
|
|
|
$
|
0.48
|
|
|
|
|
|
|
|
|
|
|
|
Retained
Earnings
|
|
|
|
|
|
|
|
Balance at beginning
of period
|
$
|
1,727
|
|
|
|
|
$
|
3,452
|
|
|
|
Cumulative effect of
accounting change
|
—
|
|
|
|
|
(263)
|
|
|
|
Net
earnings
|
1,337
|
|
|
|
|
1,046
|
|
|
|
Cash dividends
declared
|
(415)
|
|
|
|
|
(382)
|
|
|
|
Share
repurchases
|
(927)
|
|
|
|
|
(758)
|
|
|
|
Balance at end of
period
|
$
|
1,722
|
|
|
|
|
$
|
3,095
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 $1,333 million for the three
months ended May 1, 2020 and $1,043 million for the three
months ended May 3, 2019.
|
Lowe's Companies,
Inc.
Consolidated
Statements of Comprehensive Income (Unaudited)
In Millions, Except
Percentage Data
|
|
|
Three Months
Ended
|
|
May 1,
2020
|
|
May 3,
2019
|
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
Net
earnings
|
$
|
1,337
|
|
|
6.80
|
|
|
$
|
1,046
|
|
|
5.90
|
|
Foreign currency
translation adjustments – net of tax
|
(159)
|
|
|
(0.82)
|
|
|
(33)
|
|
|
(0.18)
|
|
Cash flow hedges –
net of tax
|
(102)
|
|
|
(0.52)
|
|
|
(15)
|
|
|
(0.09)
|
|
Other
|
4
|
|
|
0.03
|
|
|
—
|
|
|
—
|
|
Other
comprehensive loss
|
(257)
|
|
|
(1.31)
|
|
|
(48)
|
|
|
(0.27)
|
|
Comprehensive
income
|
$
|
1,080
|
|
|
5.49
|
|
|
$
|
998
|
|
|
5.63
|
|
|
|
|
|
|
|
|
|
Lowe's Companies,
Inc.
Consolidated
Balance Sheets (Unaudited)
In Millions, Except
Par Value Data
|
|
|
|
|
|
|
|
|
|
|
May 1,
2020
|
|
May 3,
2019
|
|
January 31,
2020
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
5,955
|
|
|
$
|
2,973
|
|
|
$
|
716
|
|
Short-term
investments
|
|
201
|
|
|
190
|
|
|
160
|
|
Merchandise inventory
– net
|
|
14,283
|
|
|
15,026
|
|
|
13,179
|
|
Other current
assets
|
|
1,487
|
|
|
1,146
|
|
|
1,263
|
|
Total current
assets
|
|
21,926
|
|
|
19,335
|
|
|
15,318
|
|
Property, less
accumulated depreciation
|
|
18,501
|
|
|
18,150
|
|
|
18,669
|
|
Operating lease
right-of-use assets
|
|
3,876
|
|
|
3,926
|
|
|
3,891
|
|
Long-term
investments
|
|
300
|
|
|
235
|
|
|
372
|
|
Deferred income taxes
– net
|
|
215
|
|
|
495
|
|
|
216
|
|
Other
assets
|
|
1,014
|
|
|
1,078
|
|
|
1,005
|
|
Total
assets
|
|
$
|
45,832
|
|
|
$
|
43,219
|
|
|
$
|
39,471
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
1,000
|
|
|
$
|
—
|
|
|
$
|
1,941
|
|
Current maturities of
long-term debt
|
|
604
|
|
|
1,008
|
|
|
597
|
|
Current operating
lease liabilities
|
|
506
|
|
|
500
|
|
|
501
|
|
Accounts
payable
|
|
10,841
|
|
|
11,485
|
|
|
7,659
|
|
Accrued compensation
and employee benefits
|
|
982
|
|
|
769
|
|
|
684
|
|
Deferred
revenue
|
|
1,212
|
|
|
1,376
|
|
|
1,219
|
|
Other current
liabilities
|
|
3,180
|
|
|
2,643
|
|
|
2,581
|
|
Total current
liabilities
|
|
18,325
|
|
|
17,781
|
|
|
15,182
|
|
Long-term debt,
excluding current maturities
|
|
20,200
|
|
|
16,542
|
|
|
16,768
|
|
Noncurrent operating
lease liabilities
|
|
3,915
|
|
|
4,064
|
|
|
3,943
|
|
Deferred revenue –
extended protection plans
|
|
915
|
|
|
837
|
|
|
894
|
|
Other
liabilities
|
|
761
|
|
|
759
|
|
|
712
|
|
Total
liabilities
|
|
44,116
|
|
|
39,983
|
|
|
37,499
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
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
– 755 million, 795 million, and 763 million shares,
respectively
|
|
377
|
|
|
397
|
|
|
381
|
|
Capital in excess of
par value
|
|
10
|
|
|
—
|
|
|
—
|
|
Retained
earnings
|
|
1,722
|
|
|
3,095
|
|
|
1,727
|
|
Accumulated other
comprehensive loss
|
|
(393)
|
|
|
(256)
|
|
|
(136)
|
|
Total
shareholders' equity
|
|
1,716
|
|
|
3,236
|
|
|
1,972
|
|
Total liabilities
and shareholders' equity
|
|
$
|
45,832
|
|
|
$
|
43,219
|
|
|
$
|
39,471
|
|
|
|
|
|
|
|
|
Lowe's Companies,
Inc.
Consolidated
Statements of Cash Flows (Unaudited)
In
Millions
|
|
|
Three Months
Ended
|
|
May 1,
2020
|
|
May 3,
2019
|
Cash flows from
operating activities:
|
|
|
|
Net
earnings
|
$
|
1,337
|
|
|
$
|
1,046
|
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
373
|
|
|
337
|
|
Noncash lease
expense
|
116
|
|
|
114
|
|
Deferred income
taxes
|
46
|
|
|
(106)
|
|
Loss (gain) on
property and other assets – net
|
17
|
|
|
(2)
|
|
Share-based payment
expense
|
27
|
|
|
42
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Merchandise inventory
– net
|
(1,183)
|
|
|
(2,478)
|
|
Other operating
assets
|
(206)
|
|
|
(275)
|
|
Accounts
payable
|
3,207
|
|
|
3,199
|
|
Other operating
liabilities
|
716
|
|
|
260
|
|
Net cash provided
by operating activities
|
4,450
|
|
|
2,137
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Purchases of
investments
|
(70)
|
|
|
(3)
|
|
Proceeds from
sale/maturity of investments
|
107
|
|
|
54
|
|
Capital
expenditures
|
(328)
|
|
|
(205)
|
|
Proceeds from sale of
property and other long-term assets
|
25
|
|
|
24
|
|
Other –
net
|
(22)
|
|
|
(1)
|
|
Net cash used in
investing activities
|
(288)
|
|
|
(131)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Net change in
commercial paper
|
(941)
|
|
|
(722)
|
|
Net proceeds from
issuance of debt
|
3,961
|
|
|
2,972
|
|
Repayment of
long-term debt
|
(543)
|
|
|
(616)
|
|
Proceeds from
issuance of common stock under share-based payment plans
|
4
|
|
|
32
|
|
Cash dividend
payments
|
(420)
|
|
|
(385)
|
|
Repurchase of common
stock
|
(966)
|
|
|
(826)
|
|
Other –
net
|
(3)
|
|
|
(9)
|
|
Net cash provided
by financing activities
|
1,092
|
|
|
446
|
|
|
|
|
|
Effect of exchange
rate changes on cash
|
(15)
|
|
|
(2)
|
|
|
|
|
|
Net increase in cash
and cash equivalents,
including cash classified within current
assets held for sale
|
5,239
|
|
|
2,450
|
|
Less: Net decrease in
cash classified within current
assets held for sale
|
—
|
|
|
12
|
|
Net increase in cash
and cash equivalents
|
5,239
|
|
|
2,462
|
|
Cash and cash
equivalents, beginning of period
|
716
|
|
|
511
|
|
Cash and cash
equivalents, end of period
|
$
|
5,955
|
|
|
$
|
2,973
|
|
|
|
|
|
Lowe's Companies, Inc.
Non-GAAP Financial Measures
Reconciliation (Unaudited)
To provide additional transparency, the Company has presented
the non-GAAP financial measure of adjusted earnings per share for
comparing its operating performance for the three months ended
May 1, 2020, with the respective
period ended May 3, 2019. This
measure excludes the impact of certain discrete items, as further
described below, not contemplated in Lowe's Business Outlook to
assist the user in understanding performance relative to that
Business Outlook for the first quarter of fiscal 2020 and fiscal
2019.
The Company believes this non-GAAP financial measure provides
useful insight for analysts and investors in evaluating the
Company's operational performance.
Fiscal 2020 Impacts
For fiscal 2020, the Company has
recognized financial impacts from the following discrete items, not
contemplated in the Company's Business Outlook for the first
quarter of fiscal 2020:
- Beginning in the third quarter of fiscal 2019, the Company
began a strategic review of its Canadian operations, and in the
fourth quarter of fiscal 2019, the Company announced additional
actions to improve future performance and profitability of its
Canadian operations. As a result of this review and related
actions, in the first quarter of fiscal 2020, the Company
recognized $9 million of pre-tax
operating costs related to severance and other costs (2019
Canada restructuring).
Fiscal 2019 Impacts
During fiscal 2019, the Company
recognized financial impacts from the following discrete items, not
contemplated in the Company's Business Outlook for the first
quarter of fiscal 2019:
- Prior to the beginning of fiscal 2019, the Company announced
its intention to exit its Mexico
retail operations and had planned to sell the operating
business. However, in the first quarter of 2019, after an
extensive market evaluation, the decision was made to instead sell
the assets of the business. That decision resulted in an
$82 million tax benefit in the first
quarter, partially offset by $12
million in pre-tax operating losses associated with the exit
and ongoing wind-down of Mexico
retail operations (Mexico
adjustments).
Adjusted diluted earnings per share should not be considered an
alternative to, or more meaningful indicator of, the Company's
diluted earnings per share as prepared in accordance with
GAAP. The Company's methods of determining non-GAAP financial
measures may differ from the method used by other companies for
this or similar non-GAAP financial measures. Accordingly,
this non-GAAP measure may not be comparable to the measures used by
other companies.
Detailed reconciliations between the Company's GAAP and non-GAAP
financial results are shown below and available on the Company's
website at www.lowes.com/investor.
|
Three Months
Ended
|
|
(Unaudited)
|
|
(Unaudited)
|
|
May 1,
2020
|
|
May 3,
2019
|
(in millions, except
per share data)
|
Pre-Tax
Earnings
|
|
Tax
|
|
Net
Earnings
|
|
Pre-Tax
Earnings
|
|
Tax
|
|
Net
Earnings
|
Diluted earnings
per share, as reported
|
|
|
|
|
$
|
1.76
|
|
|
|
|
|
|
$
|
1.31
|
|
Non-GAAP
adjustments – per share impacts
|
|
|
|
|
|
|
|
|
|
|
|
2019 Canada
restructuring
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Mexico
adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
|
(0.10)
|
|
|
(0.09)
|
|
Adjusted diluted
earnings per share
|
|
|
|
|
$
|
1.77
|
|
|
|
|
|
|
$
|
1.22
|
|
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SOURCE Lowe's Companies, Inc.