— Comparable Sales Decreased 7.4%; Diluted EPS
of $3.06 —
— Updates Full Year 2023 Outlook —
MOORESVILLE, N.C., Nov. 21,
2023 /PRNewswire/ -- Lowe's Companies, Inc. (NYSE:
LOW) today reported net earnings of $1.8
billion and diluted earnings per share (EPS) of $3.06 for the quarter ended Nov. 3, 2023, compared to diluted EPS of
$0.25 in the third quarter of 2022,
which included a pre-tax long-lived asset impairment of
$2.1 billion related to its Canadian
retail business. Excluding the impairment charge in the prior
year, third quarter 2022 adjusted diluted EPS1 was
$3.27.
Total sales for the quarter were $20.5
billion2. Comparable sales decreased
7.4%3 due to a decline in DIY discretionary spending,
partially offset by positive Pro customer comp sales.
"In the third quarter, the company delivered strong operating
performance and improved customer service despite a
greater-than-expected pullback in DIY discretionary spending,
particularly in bigger ticket categories. Given our 75% DIY
mix, the DIY pressure disproportionately impacted our third quarter
comp performance. At the same time, our investments in Pro
continue to resonate, resulting in positive Pro comps again this
quarter," said Marvin R. Ellison,
Lowe's chairman, president and CEO. "As we look ahead, Lowe's is
committed to offering value and convenience this holiday season,
helping our customers save time and money. I'd like to extend my
appreciation to our hardworking front-line associates who continue
to elevate the customer experience."
During the quarter, Lowe's opened one store and three Lowe's
Outlet stores. As of Nov. 3, 2023,
Lowe's operated 1,746 stores representing 194.9 million square feet
of retail selling space.
Capital Allocation
The company continues to execute a disciplined capital
allocation program to deliver long-term, sustainable shareholder
value. During the quarter, the company repurchased approximately
7.3 million shares for $1.6 billion,
and it paid $642 million in
dividends.
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.
|
2 Total
third quarter sales includes an approximately $115 million headwind
related to a timing shift in our fiscal calendar as we cycle over a
53-week year.
|
3 Comparable
sales are based on comparison to weeks 28-40 in 2022.
|
|
Based on lower-than-expected DIY sales, the company is updating
its outlook for the operating results of full year 2023.
Adjusted operating income, adjusted operating margin, adjusted
effective income tax and adjusted diluted EPS are non-GAAP
financial measures that exclude the impact and timing of the gain
associated with the 2022 sale of the Canadian retail business,
recorded in the first quarter. The company does not provide a
reconciliation for non-GAAP estimates on a forward-looking basis
where it is unable to provide a meaningful or accurate calculation
or estimation of reconciling items (which may be significant)
without unreasonable effort, including timing of adjustments
associated with the sale of our Canadian retail business.
Full Year 2023 Outlook – a 52-week year (comparisons to full
year 2022 – a 53-week year)
- Total sales of approximately $86
billion (previously $87 –
$89 billion)
- Comparable sales expected to be down approximately -5% as
compared to prior year (previously down -2% to -4%)
- Adjusted operating income as a percentage of sales (adjusted
operating margin) of approximately 13.3% (previously 13.4% to
13.6%)
- Interest expense of approximately $1.4
billion (previously $1.5
billion)
- Adjusted effective income tax rate of approximately 25%
- Adjusted diluted earnings per share of approximately
$13.00 (previously $13.20 to $13.60)
- Capital expenditures of up to $2
billion
A conference call to discuss third quarter 2023 operating
results is scheduled for today, Tuesday,
Nov. 21, at 9 a.m. 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
Third Quarter 2023 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 17 million customer
transactions a week in the U.S. With total fiscal year 2022 sales
of over $97 billion, approximately
$92 billion of sales were generated
in the U.S., where Lowe's operates over 1,700 home improvement
stores and employs approximately 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 (including objectives related to environmental, social,
and governance matters), 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 volatility and/or lack of liquidity from time
to time in U.S. and world financial markets and the consequent
reduced availability and/or higher cost of borrowing to Lowe's and
its customers, slower rates of growth in real disposable personal
income that could affect the rate of growth in consumer spending,
inflation and its impacts on discretionary spending and on our
costs, shortages, and other disruptions in the labor supply,
interest rate and currency fluctuations, home price appreciation or
decreasing housing turnover, age of housing stock, the availability
of consumer credit and of mortgage financing, trade policy changes
or additional tariffs, outbreaks of pandemics, fluctuations in fuel
and energy costs, inflation or deflation of commodity prices,
natural disasters, armed conflicts, acts of both domestic and
international terrorism, 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
Contacts:
|
Shareholder/Analyst
Inquiries:
|
|
Media
Inquiries:
|
|
Kate
Pearlman
|
|
Steve
Salazar
|
|
704-775-3856
|
|
steve.j.salazar@lowes.com
|
|
kate.pearlman@lowes.com
|
|
|
Lowe's Companies,
Inc.
Consolidated
Statements of Current Earnings and Accumulated Deficit
(Unaudited)
In Millions, Except Per
Share and Percentage Data
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
November 3,
2023
|
|
October 28,
2022
|
|
November 3,
2023
|
|
October 28,
2022
|
Current
Earnings
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
Net
sales
|
$
20,471
|
|
100.00
|
|
$
23,479
|
|
100.00
|
|
$
67,775
|
|
100.00
|
|
$
74,614
|
|
100.00
|
Cost of
sales
|
13,580
|
|
66.34
|
|
15,661
|
|
66.70
|
|
44,958
|
|
66.33
|
|
49,614
|
|
66.49
|
Gross
margin
|
6,891
|
|
33.66
|
|
7,818
|
|
33.30
|
|
22,817
|
|
33.67
|
|
25,000
|
|
33.51
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
3,761
|
|
18.37
|
|
6,443
|
|
27.45
|
|
11,673
|
|
17.23
|
|
15,200
|
|
20.38
|
Depreciation and
amortization
|
434
|
|
2.12
|
|
451
|
|
1.92
|
|
1,275
|
|
1.88
|
|
1,345
|
|
1.80
|
Operating
income
|
2,696
|
|
13.17
|
|
924
|
|
3.93
|
|
9,869
|
|
14.56
|
|
8,455
|
|
11.33
|
Interest –
net
|
345
|
|
1.68
|
|
295
|
|
1.25
|
|
1,033
|
|
1.52
|
|
802
|
|
1.07
|
Pre-tax
earnings
|
2,351
|
|
11.49
|
|
629
|
|
2.68
|
|
8,836
|
|
13.04
|
|
7,653
|
|
10.26
|
Income tax
provision
|
578
|
|
2.83
|
|
475
|
|
2.02
|
|
2,130
|
|
3.14
|
|
2,174
|
|
2.92
|
Net
earnings
|
$
1,773
|
|
8.66
|
|
$
154
|
|
0.66
|
|
$
6,706
|
|
9.90
|
|
$
5,479
|
|
7.34
|
Weighted average common
shares outstanding –
basic
|
576
|
|
|
|
618
|
|
|
|
585
|
|
|
|
638
|
|
|
Basic earnings per
common share (1)
|
$
3.07
|
|
|
|
$
0.25
|
|
|
|
$
11.43
|
|
|
|
$
8.56
|
|
|
Weighted average common
shares outstanding –
diluted
|
577
|
|
|
|
620
|
|
|
|
587
|
|
|
|
640
|
|
|
Diluted earnings per
common share (1)
|
$
3.06
|
|
|
|
$
0.25
|
|
|
|
$
11.40
|
|
|
|
$
8.53
|
|
|
Cash dividends per
share
|
$
1.10
|
|
|
|
$
1.05
|
|
|
|
$
3.25
|
|
|
|
$
2.90
|
|
|
Accumulated
Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning
of period
|
$
(15,341)
|
|
|
|
$
(8,895)
|
|
|
|
$
(14,862)
|
|
|
|
$
(5,115)
|
|
|
Net earnings
|
1,773
|
|
|
|
154
|
|
|
|
6,706
|
|
|
|
5,479
|
|
|
Cash dividends
declared
|
(633)
|
|
|
|
(643)
|
|
|
|
(1,898)
|
|
|
|
(1,833)
|
|
|
Share
repurchases
|
(1,543)
|
|
|
|
(3,929)
|
|
|
|
(5,690)
|
|
|
|
(11,844)
|
|
|
Balance at end of
period
|
$
(15,744)
|
|
|
|
$
(13,313)
|
|
|
|
$
(15,744)
|
|
|
|
$
(13,313)
|
|
|
(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 $1,769
million for the three months ended November 3, 2023, and $152
million for the three months ended October 28, 2022. Net
earnings allocable to common shares used in the basic and diluted
earnings per share calculation were $6,688 million for the nine
months ended November 3, 2023, and $5,462 million for the nine
months ended October 28, 2022.
|
Lowe's Companies,
Inc.
Consolidated
Statements of Comprehensive Income (Unaudited)
In Millions, Except
Percentage Data
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
November 3,
2023
|
|
October 28,
2022
|
|
November 3,
2023
|
|
October 28,
2022
|
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
Net
earnings
|
$
1,773
|
|
8.66
|
|
$
154
|
|
0.66
|
|
$
6,706
|
|
9.90
|
|
$
5,479
|
|
7.34
|
Foreign currency
translation adjustments – net of tax
|
—
|
|
—
|
|
(168)
|
|
(0.72)
|
|
5
|
|
0.01
|
|
(173)
|
|
(0.23)
|
Cash flow hedges – net
of tax
|
(4)
|
|
(0.01)
|
|
170
|
|
0.72
|
|
(10)
|
|
(0.02)
|
|
352
|
|
0.47
|
Other
|
—
|
|
—
|
|
1
|
|
—
|
|
—
|
|
—
|
|
(3)
|
|
—
|
Other comprehensive
(loss)/income
|
(4)
|
|
(0.01)
|
|
3
|
|
—
|
|
(5)
|
|
(0.01)
|
|
176
|
|
0.24
|
Comprehensive
income
|
$
1,769
|
|
8.65
|
|
$
157
|
|
0.66
|
|
$
6,701
|
|
9.89
|
|
$
5,655
|
|
7.58
|
Lowe's Companies,
Inc.
Consolidated Balance
Sheets (Unaudited)
In Millions, Except Par
Value Data
|
|
|
|
|
|
|
|
November 3,
2023
|
|
October 28,
2022
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
1,210
|
|
$
3,192
|
Short-term
investments
|
|
321
|
|
464
|
Merchandise inventory
– net
|
|
17,530
|
|
19,817
|
Other current
assets
|
|
907
|
|
1,518
|
Total current
assets
|
|
19,968
|
|
24,991
|
Property, less
accumulated depreciation
|
|
17,527
|
|
17,275
|
Operating lease
right-of-use assets
|
|
3,647
|
|
3,512
|
Long-term
investments
|
|
238
|
|
63
|
Deferred income taxes
– net
|
|
280
|
|
301
|
Other
assets
|
|
859
|
|
831
|
Total
assets
|
|
$
42,519
|
|
$
46,973
|
|
|
|
|
|
Liabilities and
shareholders' deficit
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Current maturities of
long-term debt
|
|
$
544
|
|
$
609
|
Current operating
lease liabilities
|
|
533
|
|
651
|
Accounts
payable
|
|
9,914
|
|
12,249
|
Accrued compensation
and employee benefits
|
|
750
|
|
1,405
|
Deferred
revenue
|
|
1,499
|
|
1,736
|
Income taxes
payable
|
|
121
|
|
913
|
Other current
liabilities
|
|
3,135
|
|
3,313
|
Total current
liabilities
|
|
16,496
|
|
20,876
|
Long-term debt,
excluding current maturities
|
|
35,374
|
|
32,904
|
Noncurrent operating
lease liabilities
|
|
3,602
|
|
4,048
|
Deferred revenue –
Lowe's protection plans
|
|
1,228
|
|
1,184
|
Other
liabilities
|
|
966
|
|
829
|
Total
liabilities
|
|
57,666
|
|
59,841
|
|
|
|
|
|
Shareholders'
deficit:
|
|
|
|
|
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
–
575 million and 611 million, respectively
|
|
288
|
|
305
|
Capital in excess of
par value
|
|
7
|
|
—
|
Accumulated
deficit
|
|
(15,744)
|
|
(13,313)
|
Accumulated other
comprehensive income
|
|
302
|
|
140
|
Total shareholders'
deficit
|
|
(15,147)
|
|
(12,868)
|
Total liabilities
and shareholders' deficit
|
|
$
42,519
|
|
$
46,973
|
|
|
|
|
|
Lowe's Companies,
Inc.
Consolidated
Statements of Cash Flows (Unaudited)
In Millions
|
|
Nine Months
Ended
|
|
November 3,
2023
|
|
October 28,
2022
|
Cash flows from
operating activities:
|
|
|
|
Net earnings
|
$
6,706
|
|
$
5,479
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
1,427
|
|
1,509
|
Noncash lease
expense
|
370
|
|
403
|
Deferred income
taxes
|
(27)
|
|
(252)
|
Asset impairment and
loss on property – net
|
50
|
|
2,113
|
Gain on sale of
business
|
(79)
|
|
—
|
Share-based payment
expense
|
160
|
|
165
|
Changes in operating
assets and liabilities:
|
|
|
|
Merchandise inventory
– net
|
1,002
|
|
(2,308)
|
Other operating
assets
|
236
|
|
20
|
Accounts
payable
|
(610)
|
|
921
|
Deferred
revenue
|
(77)
|
|
(117)
|
Other operating
liabilities
|
(2,126)
|
|
205
|
Net cash provided by
operating activities
|
7,032
|
|
8,138
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Purchases of
investments
|
(1,283)
|
|
(659)
|
Proceeds from
sale/maturity of investments
|
1,215
|
|
597
|
Capital
expenditures
|
(1,344)
|
|
(1,090)
|
Proceeds from sale of
property and other long-term assets
|
29
|
|
37
|
Proceeds from sale of
business
|
100
|
|
—
|
Other – net
|
(23)
|
|
—
|
Net cash used in
investing activities
|
(1,306)
|
|
(1,115)
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Net change in
commercial paper
|
(499)
|
|
—
|
Net proceeds from
issuance of debt
|
2,983
|
|
9,667
|
Repayment of
debt
|
(576)
|
|
(831)
|
Proceeds from issuance
of common stock under share-based payment plans
|
79
|
|
86
|
Cash dividend
payments
|
(1,899)
|
|
(1,727)
|
Repurchases of common
stock
|
(5,937)
|
|
(12,127)
|
Other – net
|
(15)
|
|
—
|
Net cash used in
financing activities
|
(5,864)
|
|
(4,932)
|
|
|
|
|
Effect of exchange
rate changes on cash
|
—
|
|
(32)
|
|
|
|
|
Net (decrease)/increase
in cash and cash equivalents
|
(138)
|
|
2,059
|
Cash and cash
equivalents, beginning of period
|
1,348
|
|
1,133
|
Cash and cash
equivalents, end of period
|
$
1,210
|
|
$
3,192
|
Lowe's Companies, Inc.
Non-GAAP Financial Measure
Reconciliation (Unaudited)
To provide additional transparency, the Company has presented a
comparison to the non-GAAP financial measure of adjusted diluted
earnings per share for the three months ended October 28, 2022. This measure excludes the
impact of a certain item, further described below, not contemplated
in Lowe's Business Outlook to assist analysts and investors in
understanding the comparison of operational performance for the
third quarter of fiscal 2022.
Fiscal 2022 Impacts
During fiscal 2022, the Company recognized financial impacts
from the following, not contemplated in the Company's Business
Outlook for fiscal 2022:
- In the third quarter of fiscal 2022, the Company recognized a
pre-tax $2.1 billion long-lived asset
impairment of the Canadian retail business (Canadian retail
business transaction).
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.
A reconciliation between the Company's GAAP and non-GAAP
financial results is shown below and available on the Company's
website at ir.lowes.com.
|
Three Months
Ended
|
|
October 28,
2022
|
|
Pre-Tax
Earnings
|
|
Tax1
|
|
Net
Earnings
|
Diluted earnings per
share, as reported
|
|
|
|
|
$
0.25
|
Non-GAAP
adjustments – per share impacts
|
|
|
|
|
|
Canadian retail
business transaction
|
3.32
|
|
(0.30)
|
|
3.02
|
Adjusted diluted
earnings per share
|
|
|
|
|
$
3.27
|
1
|
Represents the
corresponding tax benefit or expense specifically related to the
item excluded from adjusted diluted earnings per
share.
|
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SOURCE Lowe's Companies, Inc.