Lowe’s Reports First Quarter Sales and Earnings Results Business Wire MOORESVILLE, N.C. -- May 22, 2013 Lowe’s Companies, Inc. (NYSE: LOW), the world’s second largest home improvement retailer, today reported net earnings of $540 million for the quarter ended May 3, 2013, a 2.5 percent increase over the same period a year ago. Diluted earnings per share increased 14.0 percent to $0.49 from $0.43 in the first quarter of 2012. Sales for the quarter decreased 0.5 percent to $13.1 billion from $13.2 billion in the first quarter of 2012, while comparable sales for the quarter decreased 0.7 percent. “Results for indoor categories were solid for the quarter, a testament to the team’s continued focus on improving our core business through cross-functional collaboration and consistent execution in stores and across other selling channels,” commented Robert A. Niblock, Lowe’s chairman, president and CEO. “Cooler than normal temperatures and greater precipitation resulted in a delayed spring selling season which impacted our results in exterior categories,” Niblock added. “While overall performance in the month of March was particularly soft, April improved significantly and we have maintained that positive momentum through the first few weeks of May.” Delivering on the commitment to return excess cash to shareholders, the company repurchased $1.0 billion of stock and paid $178 million in dividends in the first quarter of 2013. As of May 3, 2013, Lowe’s operated 1,755 stores in the United States, Canada and Mexico, representing 197.5 million square feet of retail selling space. A conference call to discuss first quarter 2013 operating results is scheduled for today (Wednesday, May 22) 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 First Quarter 2013 Earnings Conference Call Webcast. Supplemental slides will be available fifteen minutes prior to the start of the conference call. A replay of the call will be archived on Lowes.com/investor until August 20, 2013. Lowe’s Business Outlook Fiscal Year 2013 (comparisons to fiscal year 2012; based on U.S. GAAP unless otherwise noted) *Total sales are expected increase approximately 4 percent. *Comparable sales are expected to increase approximately 3.5 percent. *The company expects to open approximately 10 stores in fiscal year 2013. *Earnings before interest and taxes as a percentage of sales (operating margin) are expected to increase approximately 60 basis points. *The effective income tax rate is expected to be approximately 38.1%. *Diluted earnings per share of approximately $2.05 are expected for the fiscal year ending January 31, 2014. Disclosure Regarding Forward-Looking Statements This news release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Statements of the company's expectations for sales growth, comparable store sales, earnings and performance, shareholder value, capital expenditures, cash flows, the housing market, the home improvement industry, demand for services, share repurchases, the Company’s strategic initiatives and any statement of an assumption underlying any of the foregoing, constitute "forward-looking statements" under the Act. Although we believe that the expectations, opinions, projections, and comments reflected in these forward-looking statements are reasonable, we can give no assurance that such statements will prove to be correct. A wide variety of potential risks, uncertainties, and other factors could materially affect our ability to achieve the results either expressed or implied by our forward-looking statements including, but not limited to, changes in general economic conditions, such as continued high rates of unemployment, interest rate and currency fluctuations, higher fuel and other energy costs, slower growth in personal income, changes in consumer spending, changes in the rate of housing turnover, the availability and increasing regulation of consumer credit and of mortgage financing, inflation or deflation of commodity prices, and other factors which can negatively affect our customers, as well as our ability to: (i) respond to adverse trends in the housing industry, such as the psychological effects of lower home prices, and in the level of repairs, remodeling, and additions to existing homes, as well as a general reduction in commercial building activity; (ii) secure, develop, and otherwise implement new technologies and processes designed to enhance our efficiency and competitiveness; (iii) attract, train, and retain highly-qualified associates; (iv) manage our business effectively as we adapt our traditional operating model to meet the changing expectations of our customers; (v) to maintain, improve, upgrade and protect our critical information systems; (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 or environmental issues; and (ix) respond to unanticipated weather conditions that could adversely affect sales. In addition, we could experience additional impairment losses if 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. For more information about these and other risks and uncertainties that we are exposed to, you should read the "Risk Factors" and "Critical Accounting Policies and Estimates" included in our Annual Report on Form 10-K to the United States Securities and Exchange Commission (the “SEC”) and the description of material changes therein or updated version thereof, if any, included in our Quarterly Reports on Form 10-Q. The forward-looking statements contained in this news release 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 the “Risk Factors” included in our Annual Report on Form 10-K to the SEC and the description of material changes, if any, therein included in our Quarterly Reports on Form 10-Q. 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. With fiscal year 2012 sales of $50.5 billion, Lowe’s Companies, Inc. is a FORTUNE^® 100 company that serves approximately 15 million customers a week at more than 1,750 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. Lowe's Companies, Inc. Consolidated Statements of Current and Retained Earnings (Unaudited) In Millions, Except Per Share and Percentage Data Three Months Ended May 3, 2013 May 4, 2012 Current Earnings Amount Percent Amount Percent Net sales $ 13,088 100.00 $ 13,153 100.00 Cost of sales 8,533 65.20 8,589 65.30 Gross margin 4,555 34.80 4,564 34.70 Expenses: Selling, general and 3,222 24.62 3,241 24.65 administrative Depreciation 352 2.69 370 2.81 Interest - net 113 0.86 103 0.78 Total expenses 3,687 28.17 3,714 28.24 Pre-tax earnings 868 6.63 850 6.46 Income tax provision 328 2.50 323 2.45 Net earnings $ 540 4.13 $ 527 4.01 Weighted average common shares outstanding - 1,088 1,206 basic Basic earnings per $ 0.49 $ 0.43 common share ^(1) Weighted average common shares outstanding - 1,090 1,208 diluted Diluted earnings per $ 0.49 $ 0.43 common share ^(1) Cash dividends per $ 0.16 $ 0.14 share Retained Earnings Balance at beginning of $ 13,224 $ 15,852 period Net earnings 540 527 Cash dividends (174) (165) Share repurchases (972) (1,657) Balance at end of $ 12,618 $ 14,557 period ^(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 $537 million for the three months ended May 3, 2013 and $524 million for the three months ended May 4, 2012. Lowe's Companies, Inc. Consolidated Statements of Comprehensive Income (Unaudited) In Millions, Except Percentage Data Three Months Ended May 3,2013 May 4, 2012 Amount Percent Amount Percent Net earnings $ 540 4.13 $ 527 4.01 Foreign currency translation - - 6 0.05 adjustments - net of tax Net unrealized investment - - - - gains - net of tax Other comprehensive income - - 6 0.05 Comprehensive income $ 540 4.13 $ 533 4.06 Lowe's Companies, Inc. Consolidated Balance Sheets In Millions, Except Par Value Data (Unaudited) (Unaudited) May 3, 2013 May 4, 2012 February 1, 2013 Assets Current assets: Cash and cash $ 1,081 $ 3,072 $ 541 equivalents Short-term 118 161 125 investments Merchandise 10,274 9,786 8,600 inventory - net Deferred income 228 279 217 taxes - net Other current assets 313 330 301 Total current assets 12,014 13,628 9,784 Property, less 21,257 21,821 21,477 accumulated depreciation Long-term 272 710 271 investments Other assets 1,188 1,049 1,134 Total assets $ 34,731 $ 37,208 $ 32,666 Liabilities and shareholders' equity Current liabilities: Current maturities $ 47 $ 593 $ 47 of long-term debt Accounts payable 7,041 6,977 4,657 Accrued compensation and 467 492 670 employee benefits Deferred revenue 1,008 881 824 Other current 1,876 2,053 1,510 liabilities Total current 10,439 10,996 7,708 liabilities Long-term debt, excluding 9,026 9,018 9,030 current maturities Deferred income 440 412 455 taxes - net Deferred revenue - 717 716 715 extended protection plans Other liabilities 857 863 901 Total liabilities 21,479 22,005 18,809 Shareholders' equity: Preferred stock - $5 par - - - value, none issued Common stock - $.50 par value; Shares issued and outstanding May 3, 2013 1,088 May 4, 2012 1,187 February 1, 2013 1,110 544 594 555 Capital in excess of 38 - 26 par value Retained earnings 12,618 14,557 13,224 Accumulated other 52 52 52 comprehensive income Total shareholders' 13,252 15,203 13,857 equity Total liabilities and $ 34,731 $ 37,208 $ 32,666 shareholders' equity Consolidated Statements of Cash Flows (Unaudited) In Millions Three Months Ended May 3, 2013 May 4, 2012 Cash flows from operating activities: Net earnings $ 540 $ 527 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 376 396 Deferred income taxes (26 ) (230 ) Loss on property and other assets - net 5 19 Loss on equity method investments 15 15 Share-based payment expense 18 25 Net changes in operating assets and liabilities: Merchandise inventory - net (1,674 ) (1,432 ) Other operating assets (5 ) (65 ) Accounts payable 2,381 2,625 Other operating liabilities 362 587 Net cash provided by operating activities 1,992 2,467 Cash flows from investing activities: Purchases of investments (84 ) (708 ) Proceeds from sale/maturity of investments 89 627 Capital expenditures (196 ) (337 ) Contributions to equity method investments (73 ) (70 ) - net Proceeds from sale of property and other 6 29 long-term assets Other - net (5 ) (11 ) Net cash used in investing activities (263 ) (470 ) Cash flows from financing activities: Net proceeds from issuance of long-term - 1,984 debt Repayment of long-term debt (11 ) (10 ) Proceeds from issuance of common stock under 40 53 share-based payment plans Cash dividend payments (178 ) (174 ) Repurchase of common stock (1,046 ) (1,789 ) Other - net 5 (4 ) Net cash (used in) provided by financing (1,190 ) 60 activities Effect of exchange rate changes on cash 1 1 Net increase in cash and cash equivalents 540 2,058 Cash and cash equivalents, beginning of 541 1,014 period Cash and cash equivalents, end of period $ 1,081 $ 3,072 Contact: Shareholders’/Analysts’ Inquiries: Tiffany Mason, 704-758-2033 firstname.lastname@example.org or Media Inquiries: Chris Ahearn, 704-758-2304 email@example.com
Lowe’s Reports First Quarter Sales and Earnings Results
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