Lowe’s reports first quarter sales and earnings results

MOORESVILLE, N.C., May 21, 2014 /PRNewswire/ — Lowe’s Companies, Inc. (NYSE: LOW) today reported net earnings of $624 million for the quarter ended May 2, 2014, a 15.6 percent increase over the same period a year ago. Diluted earnings per share increased 24.5 percent to $0.61 from $0.49 in the first quarter of 2013.

Included in the above reported results are charges related to long-lived asset impairments, which reduced pre-tax earnings for the first quarter by $23 million and diluted earnings per share by $0.01.  Also included in the above reported results is the impact of a lower tax rate in the first quarter.  The lower tax rate, primarily the result of a settlement of prior year tax matters, contributed $0.04 to diluted earnings per share.

Sales for the first quarter increased 2.4 percent to $13.4 billion from $13.1 billion in the first quarter of 2013, and comparable sales increased 0.9 percent.

«We executed well during the quarter, despite an unexpectedly prolonged winter in many areas of the country,» commented Robert A. Niblock, Lowe’s chairman, president and CEO.  «While poor weather dampened traffic and negatively impacted performance of exterior categories, results for indoor categories were solid.  We effectively aligned inventory, staffing and marketing resources by climatic zone to best serve customers’ needs.  I would like to thank our employees for their dedication to serving customers.

«Performance has improved in May which, together with our strengthening execution, gives us the confidence to reaffirm our sales and operating profit outlook for the year,» Niblock added.

Delivering on the commitment to return excess cash to shareholders, the company repurchased $850 million of stock under its share repurchase program and paid $186 million in dividends in the first quarter.

As of May 2, 2014, Lowe’s operated 1,836 home improvement and hardware stores in the United States, Canada and Mexico representing 200.7 million square feet of retail selling space.

A conference call to discuss first quarter 2014 operating results is scheduled for today (Wednesday, May 21) 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 2014 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 19, 2014.

Lowe’s Business Outlook

Fiscal Year 2014 (comparisons to fiscal year 2013; based on U.S. GAAP unless otherwise noted)

• Total sales are expected to increase approximately 5 percent.
• Comparable sales are expected to increase approximately 4 percent.
• The company expects to open approximately 10 home improvement and 5 hardware stores.
• Earnings before interest and taxes as a percentage of sales (operating margin) are expected to increase approximately 65 basis points.
• The effective income tax rate is expected to be approximately 37.2%.
• Diluted earnings per share of approximately $2.63 are expected for the fiscal year ending January 30, 2015.

The company raised its diluted earnings per share outlook for the year as a result of the lower tax rate, primarily the result of a settlement of prior year tax matters, offset by charges related to long-lived asset impairments in the first quarter.