MOORESVILLE, N.C., Aug. 18, 2021 /PRNewswire/ -- Lowe's
Companies, Inc. (NYSE: LOW) today reported net earnings of
$3.0 billion and diluted earnings per
share (EPS) of $4.25 for the quarter
ended July 30, 2021 compared to net earnings of $2.8 billion and diluted EPS of $3.74 in the second quarter of 2020.
Excluding charges in the prior-year period related to the strategic
review of certain operations, second quarter diluted EPS of
$4.25 increased 13% from adjusted
diluted EPS of $3.75 in the second
quarter of 20201.
Total sales for the second quarter were $27.6 billion compared to $27.3 billion in the second quarter of 2020, and
comparable sales decreased 1.6%. Comparable sales for the
U.S. home improvement business decreased 2.2% for the second
quarter.
For the sixth consecutive quarter, 100% of Lowe's stores earned
a Winning Together profit-sharing bonus, resulting in an expected
total payout of $91 million to
front-line hourly associates. This payment is $20 million above the target level.
"Our strong results this quarter demonstrate that our Total Home
strategy is working, with U.S. sales comps up 32% on a two-year
basis. In the quarter, we drove 21% growth in Pro, 10% growth
in Installation Services and strong comps across Décor product
categories. On Lowes.com, sales grew 7% on top of 135% growth
last year. We also delivered significant operating margin
expansion through our disciplined focus on driving productivity
across the company," commented Marvin R.
Ellison, Lowe's chairman, president and CEO. "I would
like to thank our front-line associates for their continued
dedication to serving our customers and supporting safety in our
stores. Looking forward, I am confident in the positive
outlook for our industry, and our ability to drive operating margin
expansion and market share gains."
Capital Allocation
The Company continues to leverage
its disciplined capital allocation program to deliver long-term,
sustainable shareholder value. During the quarter, the
Company repurchased 16.4 million shares for $3.1 billion and paid $430
million in dividends.
As of July 30, 2021, Lowe's operated 1,973 home improvement
and hardware stores in the United
States and Canada
representing 208 million square feet of retail selling space, and
it serviced approximately 230 dealer-owned stores.
The Company delivered very strong financial results in the first
half of 2021, with strong sales trends continuing into
August. While the business environment remains uncertain, the
Company is raising its outlook for the operating results of Full
Year Fiscal 2021.
Full Year 2021 Financial Outlook (comparisons to
full year 2020)
- Revenue of approximately $92
billion, representing approximately 30% comparable sales
growth on a two-year basis.
- Gross margin rate up slightly, compared to prior year.
- Operating income as a percentage of sales (operating margin) of
12.2%.
- Share repurchase of a minimum of $9
billion.
For Fiscal 2021, the Company expects capital expenditures of
approximately $2 billion.
A conference call to discuss second quarter 2021 operating
results is scheduled for today, Wednesday, August 18, at
9:00 am 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 2021
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 20 million customers a
week in the United States and
Canada. With fiscal year 2020
sales of nearly $90 billion, Lowe's
and its related businesses operate or service more than 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 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, changes in commodity prices, trade policy
changes or additional tariffs, outbreaks of public health crises,
such as the COVID-19 pandemic, availability and cost of goods from
suppliers, 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
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.
Contacts:
|
Shareholder/Analyst Inquiries:
|
|
Media
Inquiries:
|
|
Kate
Pearlman
|
|
Jackie Pardini
Hartzell
|
|
704-775-3856
|
|
704-758-4317
|
|
kate.pearlman@lowes.com
|
|
jaclyn.pardini@lowes.com
|
Lowe's Companies,
Inc.
Consolidated
Statements of Current and Retained Earnings/Accumulated Deficit
(Unaudited)
In Millions, Except
Per Share and Percentage Data
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
July 30,
2021
|
|
July 31,
2020
|
|
July 30,
2021
|
|
July 31,
2020
|
Current
Earnings
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
Net
sales
|
$
|
27,570
|
|
|
100.00
|
|
|
$
|
27,302
|
|
|
100.00
|
|
|
$
|
51,993
|
|
|
100.00
|
|
|
$
|
46,977
|
|
|
100.00
|
|
Cost of
sales
|
18,258
|
|
|
66.22
|
|
|
17,998
|
|
|
65.92
|
|
|
34,551
|
|
|
66.45
|
|
|
31,161
|
|
|
66.33
|
|
Gross
margin
|
9,312
|
|
|
33.78
|
|
|
9,304
|
|
|
34.08
|
|
|
17,442
|
|
|
33.55
|
|
|
15,816
|
|
|
33.67
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
4,693
|
|
|
17.02
|
|
|
5,020
|
|
|
18.39
|
|
|
9,187
|
|
|
17.67
|
|
|
9,215
|
|
|
19.62
|
|
Depreciation and
amortization
|
409
|
|
|
1.49
|
|
|
327
|
|
|
1.20
|
|
|
800
|
|
|
1.54
|
|
|
653
|
|
|
1.39
|
|
Operating
income
|
4,210
|
|
|
15.27
|
|
|
3,957
|
|
|
14.49
|
|
|
7,455
|
|
|
14.34
|
|
|
5,948
|
|
|
12.66
|
|
Interest –
net
|
216
|
|
|
0.78
|
|
|
219
|
|
|
0.80
|
|
|
427
|
|
|
0.82
|
|
|
423
|
|
|
0.90
|
|
Pre-tax
earnings
|
3,994
|
|
|
14.49
|
|
|
3,738
|
|
|
13.69
|
|
|
7,028
|
|
|
13.52
|
|
|
5,525
|
|
|
11.76
|
|
Income tax
provision
|
976
|
|
|
3.54
|
|
|
910
|
|
|
3.33
|
|
|
1,688
|
|
|
3.25
|
|
|
1,360
|
|
|
2.89
|
|
Net
earnings
|
$
|
3,018
|
|
|
10.95
|
|
|
$
|
2,828
|
|
|
10.36
|
|
|
$
|
5,340
|
|
|
10.27
|
|
|
$
|
4,165
|
|
|
8.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding – basic
|
705
|
|
|
|
|
752
|
|
|
|
|
711
|
|
|
|
|
754
|
|
|
|
Basic earnings per
common share (1)
|
$
|
4.27
|
|
|
|
|
$
|
3.74
|
|
|
|
|
$
|
7.48
|
|
|
|
|
$
|
5.50
|
|
|
|
Weighted average
common shares outstanding – diluted
|
707
|
|
|
|
|
753
|
|
|
|
|
713
|
|
|
|
|
755
|
|
|
|
Diluted earnings
per common share (1)
|
$
|
4.25
|
|
|
|
|
$
|
3.74
|
|
|
|
|
$
|
7.46
|
|
|
|
|
$
|
5.50
|
|
|
|
Cash dividends per
share
|
$
|
0.80
|
|
|
|
|
$
|
0.55
|
|
|
|
|
$
|
1.40
|
|
|
|
|
$
|
1.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retained
Earnings/(Accumulated Deficit)
|
|
|
|
|
|
|
|
|
Balance at
beginning of period
|
$
|
98
|
|
|
|
|
$
|
1,722
|
|
|
|
|
$
|
1,117
|
|
|
|
|
$
|
1,727
|
|
|
|
Net
earnings
|
3,018
|
|
|
|
|
2,828
|
|
|
|
|
5,340
|
|
|
|
|
4,165
|
|
|
|
Cash dividends
declared
|
(563)
|
|
|
|
|
(416)
|
|
|
|
|
(993)
|
|
|
|
|
(831)
|
|
|
|
Share
repurchases
|
(3,013)
|
|
|
|
|
—
|
|
|
|
|
(5,924)
|
|
|
|
|
(927)
|
|
|
|
Balance at end of
period
|
$
|
(460)
|
|
|
|
|
$
|
4,134
|
|
|
|
|
$
|
(460)
|
|
|
|
|
$
|
4,134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 $3,007
million for the three months ended July 30, 2021, and $2,816
million for the three months ended July 31, 2020. Net
earnings allocable to common shares used in the basic and diluted
earnings per share calculation were $5,318 million for the six
months ended July 30, 2021, and $4,149 million for the six
months ended July 31, 2020.
|
Lowe's Companies,
Inc.
Consolidated
Statements of Comprehensive Income (Unaudited)
In Millions, Except
Percentage Data
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
July 30,
2021
|
|
July 31,
2020
|
|
July 30,
2021
|
|
July 31,
2020
|
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
Net
earnings
|
$
|
3,018
|
|
|
10.95
|
|
|
$
|
2,828
|
|
|
10.36
|
|
|
$
|
5,340
|
|
|
10.27
|
|
|
$
|
4,165
|
|
|
8.87
|
|
Foreign currency
translation adjustments – net of tax
|
(44)
|
|
|
(0.17)
|
|
|
114
|
|
|
0.41
|
|
|
58
|
|
|
0.11
|
|
|
(45)
|
|
|
(0.10)
|
|
Cash flow hedges – net
of tax
|
(9)
|
|
|
(0.03)
|
|
|
(5)
|
|
|
(0.02)
|
|
|
15
|
|
|
0.03
|
|
|
(108)
|
|
|
(0.23)
|
|
Other
|
(1)
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
(2)
|
|
|
—
|
|
|
4
|
|
|
0.01
|
|
Other
comprehensive (loss)/income
|
(54)
|
|
|
(0.20)
|
|
|
108
|
|
|
0.39
|
|
|
71
|
|
|
0.14
|
|
|
(149)
|
|
|
(0.32)
|
|
Comprehensive
income
|
$
|
2,964
|
|
|
10.75
|
|
|
$
|
2,936
|
|
|
10.75
|
|
|
$
|
5,411
|
|
|
10.41
|
|
|
$
|
4,016
|
|
|
8.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lowe's Companies,
Inc.
Consolidated
Balance Sheets (Unaudited)
In Millions, Except
Par Value Data
|
|
|
|
|
|
|
|
|
|
|
July 30,
2021
|
|
July 31,
2020
|
|
January 29,
2021
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
4,835
|
|
|
$
|
11,641
|
|
|
$
|
4,690
|
|
Short-term
investments
|
|
1,420
|
|
|
1,085
|
|
|
506
|
|
Merchandise inventory
– net
|
|
17,322
|
|
|
13,831
|
|
|
16,193
|
|
Other current
assets
|
|
1,506
|
|
|
1,160
|
|
|
937
|
|
Total current
assets
|
|
25,083
|
|
|
27,717
|
|
|
22,326
|
|
Property, less
accumulated depreciation (1)
|
|
19,031
|
|
|
18,734
|
|
|
19,155
|
|
Operating lease
right-of-use assets
|
|
3,820
|
|
|
3,798
|
|
|
3,832
|
|
Long-term
investments
|
|
225
|
|
|
326
|
|
|
200
|
|
Deferred income taxes
– net
|
|
221
|
|
|
267
|
|
|
340
|
|
Other assets
(1)
|
|
1,024
|
|
|
921
|
|
|
882
|
|
Total
assets
|
|
$
|
49,404
|
|
|
$
|
51,763
|
|
|
$
|
46,735
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders' (deficit)/equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
1,000
|
|
|
$
|
1,000
|
|
|
$
|
—
|
|
Current maturities of
long-term debt
|
|
1,344
|
|
|
609
|
|
|
1,112
|
|
Current operating
lease liabilities
|
|
557
|
|
|
520
|
|
|
541
|
|
Accounts
payable
|
|
12,011
|
|
|
12,916
|
|
|
10,884
|
|
Accrued compensation
and employee benefits
|
|
1,331
|
|
|
1,139
|
|
|
1,350
|
|
Deferred
revenue
|
|
2,041
|
|
|
1,715
|
|
|
1,608
|
|
Other current
liabilities
|
|
3,380
|
|
|
3,471
|
|
|
3,235
|
|
Total current
liabilities
|
|
21,664
|
|
|
21,370
|
|
|
18,730
|
|
Long-term debt,
excluding current maturities
|
|
21,967
|
|
|
20,197
|
|
|
20,668
|
|
Noncurrent operating
lease liabilities
|
|
3,841
|
|
|
3,859
|
|
|
3,890
|
|
Deferred revenue –
extended protection plans
|
|
1,097
|
|
|
981
|
|
|
1,019
|
|
Other
liabilities
|
|
1,010
|
|
|
1,000
|
|
|
991
|
|
Total
liabilities
|
|
49,579
|
|
|
47,407
|
|
|
45,298
|
|
|
|
|
|
|
|
|
Shareholders'
(deficit)/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
– 699 million, 756 million, and 731 million shares,
respectively
|
|
350
|
|
|
378
|
|
|
366
|
|
Capital in excess of
par value
|
|
—
|
|
|
129
|
|
|
90
|
|
(Accumulated
deficit)/retained earnings
|
|
(460)
|
|
|
4,134
|
|
|
1,117
|
|
Accumulated other
comprehensive loss
|
|
(65)
|
|
|
(285)
|
|
|
(136)
|
|
Total shareholders'
(deficit)/equity
|
|
(175)
|
|
|
4,356
|
|
|
1,437
|
|
Total liabilities
and shareholders' (deficit)/equity
|
|
$
|
49,404
|
|
|
$
|
51,763
|
|
|
$
|
46,735
|
|
|
|
|
|
|
|
|
(1)
|
Effective for the
year ending January 29, 2021, excess property amounts previously
reported in other assets were reclassified to property, less
accumulated depreciation. The consolidated balance sheet as
of July 31, 2020, has been revised to conform with current
presentation.
|
Lowe's Companies,
Inc.
Consolidated
Statements of Cash Flows (Unaudited)
In
Millions
|
|
|
Six Months
Ended
|
|
July 30,
2021
|
|
July 31,
2020
|
Cash flows from
operating activities:
|
|
|
|
Net earnings
|
$
|
5,340
|
|
|
$
|
4,165
|
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
907
|
|
|
747
|
|
Noncash lease
expense
|
252
|
|
|
234
|
|
Deferred income
taxes
|
110
|
|
|
(14)
|
|
Loss on property and
other assets – net
|
1
|
|
|
80
|
|
Share-based payment
expense
|
115
|
|
|
64
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Merchandise inventory
– net
|
(1,096)
|
|
|
(674)
|
|
Other operating
assets
|
(203)
|
|
|
66
|
|
Accounts
payable
|
1,115
|
|
|
5,259
|
|
Deferred
revenue
|
511
|
|
|
583
|
|
Other operating
liabilities
|
(139)
|
|
|
1,242
|
|
Net cash provided by
operating activities
|
6,913
|
|
|
11,752
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Purchases of
investments
|
(1,635)
|
|
|
(1,132)
|
|
Proceeds from
sale/maturity of investments
|
692
|
|
|
260
|
|
Capital
expenditures
|
(846)
|
|
|
(710)
|
|
Proceeds from sale of
property and other long-term assets
|
78
|
|
|
46
|
|
Other – net
|
(134)
|
|
|
(24)
|
|
Net cash used in
investing activities
|
(1,845)
|
|
|
(1,560)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Net change in
commercial paper
|
—
|
|
|
(941)
|
|
Net proceeds from
issuance of debt
|
2,988
|
|
|
3,961
|
|
Repayment of
debt
|
(568)
|
|
|
(568)
|
|
Proceeds from issuance
of common stock under share-based payment plans
|
63
|
|
|
83
|
|
Cash dividend
payments
|
(870)
|
|
|
(836)
|
|
Repurchases of common
stock
|
(6,174)
|
|
|
(966)
|
|
Other – net
|
(366)
|
|
|
(4)
|
|
Net cash (used in)
provided by financing activities
|
(4,927)
|
|
|
729
|
|
|
|
|
|
Effect of exchange
rate changes on cash
|
4
|
|
|
4
|
|
|
|
|
|
Net increase in cash
and cash equivalents
|
145
|
|
|
10,925
|
|
Cash and cash
equivalents, beginning of period
|
4,690
|
|
|
716
|
|
Cash and cash
equivalents, end of period
|
$
|
4,835
|
|
|
$
|
11,641
|
|
|
|
|
|
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 diluted earnings per
share for the three months ended July 31, 2020. This
measure excludes the impact of a discrete item, further described
below, not contemplated in Lowe's Business Outlook for the second
quarter of fiscal 2020 to assist analysts and investors in
understanding operational performance for the second quarter of
fiscal 2020.
Fiscal 2020 Impacts
During fiscal 2020, the Company
recognized financial impacts from the following discrete item, not
contemplated in the Company's Business Outlook for the second
quarter:
- 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 second quarter of fiscal 2020, the Company
recognized $10 million of pre-tax
operating costs related to inventory write-downs and other closing
costs (Canada restructuring).
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 and may
not be comparable.
Detailed reconciliations between the Company's GAAP and non-GAAP
financial results are shown below and available on the Company's
website at ir.lowes.com.
|
Three Months
Ended
|
|
(Unaudited)
|
|
July 31,
2020
|
(in millions, except
per share data)
|
Pre-Tax
Earnings
|
|
Tax
|
|
Net
Earnings
|
Diluted earnings
per share, as reported
|
|
|
|
|
$
|
3.74
|
|
Non-GAAP
adjustments – per share impacts
|
|
|
|
|
|
Canada
restructuring
|
0.01
|
|
|
—
|
|
|
0.01
|
|
Adjusted diluted
earnings per share
|
|
|
|
|
$
|
3.75
|
|
|
|
|
|
|
|
|
|
|
|
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SOURCE Lowe's Companies, Inc.