Lowe's Reports Second Quarter Sales And Earnings Results

Lowe's Companies, Inc. today reported net earnings of $1.7 billion and diluted earnings per share of $2.14 for the quarter ended Aug. 2, 2019, compared to net earnings of $1.5 billion and diluted earnings per share of $1.86 in the second quarter of 2018. 

Excluding $14 million of pre-tax operating losses associated with the wind-down of the Company's Mexico retail operations, adjusted diluted earnings per share1 increased 3.9 percent to $2.15 from adjusted diluted earnings per share1 of $2.07 in the second quarter of 2018.

Sales for the second quarter increased 0.5 percent to $21.0 billion from $20.9 billion in the second quarter of 2018, and comparable sales increased 2.3 percent. Comparable sales for the U.S. home improvement business increased 3.2 percent.

"We capitalized on spring demand, strong holiday event execution and growth in Paint and our Pro business to deliver strong second quarter results. Despite lumber deflation and difficult weather, we are pleased that we delivered positive comparable sales in all 15 geographic regions of the U.S.  This is a reflection of a solid macroeconomic backdrop and continued momentum executing our retail fundamentals framework," commented Marvin R. Ellison, Lowe's president and CEO. 

"Our transformation is ongoing, and our future is bright. We are confident that we are on the right path to capitalize on solid demand in a healthy home improvement market and generate long-term profitable growth.  I would like to thank our associates for their hard work and continued commitment to serving customers," added Ellison.

Delivering on its commitment to return excess cash to shareholders, the company repurchased $1.96 billion of stock under its share repurchase program and paid $382 million in dividends in the second quarter.

As of Aug. 2, 2019, Lowe's operated 2,003 home improvement and hardware stores in the United States and Canada representing 208.8 million square feet of retail selling space.  Lowe's is actively hiring full- and part-time associates at its corporate locations, stores and distribution centers, and has filled more than 14,000 positions since July 1. 

A conference call to discuss second quarter 2019 operating results is scheduled for today (Wednesday, Aug. 21) 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 Second Quarter 2019 Earnings Conference Call Webcast.  Supplemental materials 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 until Nov. 19, 2019.

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.

Lowe's Business Outlook

Fiscal Year 2019 (comparisons to fiscal year 2018)

• Total sales are expected to increase approximately 2 percent.
• Comparable sales are expected to increase approximately 3 percent.
• Operating income as a percentage of sales (operating margin) is expected to increase 310 to 340 basis points.
• Adjusted operating income as a percentage of sales (adjusted operating margin) is expected to increase 20 to 50 basis points.
• The effective income tax rate is expected to be approximately 24%.
• The target leverage ratio is 2.75x, therefore the company expects to repurchase approximately $4 billion of stock.
• Diluted earnings per share of $5.54 to $5.74 are expected for the fiscal year ending Jan. 31, 2020.
• Adjusted diluted earnings per share1 of $5.45 to $5.65 are expected for the fiscal year ending Jan. 31, 2020

Source : Insight DIY Team and Lowe's

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