Lowe's First Quarter Earnings

May 20, 2005 - 11:47

Lowe's Companies, Inc. reported net earnings of $590 million for the quarter ended April 29, 2005, a 30.5 percent increase over the same period a year ago. Diluted earnings per share increased 32.1 percent to $0.74 from $0.56 in the first quarter of 2004. These comparisons are influenced by the adoption of EITF 02-16, which had the effect of reducing net earnings in the first quarter of 2004.

Sales for the quarter increased 14.2 percent to $9.91 billion, up from $8.68 billion in the first quarter of 2004. Comparable store sales for the first quarter increased 3.8 percent.

"While an unusually cold, wet March in many parts of the country created challenges, our stores delivered another strong quarter," explained Robert Niblock, Lowe's chairman, president and CEO. "We achieved high single-digit comparable store sales in February and April, but they were offset by negative low single-digit comps in weather-affected March.

During the quarter, Lowe's opened 27 new stores, including two relocations. As of April 29, 2005, Lowe's operated 1,112 stores in 48 states, representing 126.5 million sq.ft. of retail selling space, a 13.1 percent increase over last year.

Second Quarter 2005 (comparisons to second quarter 2004)

  • The company expects to open 27 stores, reflecting square footage growth of approximately 14 percent.
  • Total sales are expected to increase 15-16 percent.
  • The company expects to report a comparable store sales increase of 4-6 percent.
  • Operating margin (defined as gross margin less SG&A and depreciation) is expected to be approximately flat as a percent to sales.
  • Store-opening costs are expected to be approximately $22 million.
  • Diluted earnings per share of $1-1.02 are expected.

Fiscal Year 2005 — a 53-week year (comparisons to fiscal year 2004 — a 52-week year)

  • The company expects to open 150 stores in 2005, reflecting total square footage growth of 13-14 percent.
  • Total sales are expected to increase approximately 17 percent for the year.
  • The company expects to report a comparable store sales increase of approximately 5 percent.
  • Operating margin (defined as gross margin less SG&A and depreciation) is expected to increase approximately 20 basis points.
  • Store-opening costs are expected to be approximately $132 million.
  • Diluted earnings per share of $3.25 to $3.34 are expected for the fiscal year ending Feb. 3, 2006.

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