— Comparable Sales Decreased 6.2%; Diluted EPS
of $1.77—
— Provides Full Year 2024 Outlook —
MOORESVILLE, N.C., Feb. 27,
2024 /PRNewswire/ -- Lowe's Companies, Inc.
(NYSE: LOW) today reported net earnings of $1.0 billion and diluted earnings per share (EPS)
of $1.77 for the quarter
ended Feb. 2, 2024, compared to diluted EPS of $1.58 in the fourth quarter of 2022, which
included pre-tax transaction costs of $441
million associated with the sale of our Canadian retail
business. Excluding the transaction costs in the prior year,
fourth quarter 2022 adjusted diluted EPS1 was
$2.28.
Total sales for the quarter were $18.6
billion,2 compared to $22.4 billion in the prior year quarter.
Prior-year quarterly sales included approximately $1.4 billion from the additional 53rd
week, as well as $958 million
generated from our Canadian retail business.
Comparable sales3 for the quarter decreased 6.2% due
to a slowdown in DIY demand and unfavorable January winter weather,
while Pro customer comparable sales were flat for the quarter.
"This quarter we delivered strong operating profit and improved
customer satisfaction, despite the continued pullback in DIY
spending," commented Marvin R.
Ellison, Lowe's chairman, president and CEO. "We remain
confident in the long-term strength of the home improvement market,
and we are making the right investments in our Total Home strategy
to take share. We are also pleased to award $140 million in discretionary bonuses to our
frontline associates in recognition of their exceptional customer
service in 2023."
As of Feb. 2, 2024, Lowe's
operated 1,746 stores representing 194.9 million square feet of
retail selling space.
Capital Allocation
The company remains committed to a
best-in-class capital allocation strategy focused on driving
long-term, sustainable shareholder value. During the quarter, the
company repurchased approximately 1.9 million shares for
$404 million, and it repurchased 29.9
million shares for $6.3 billion for
the year.
The company also paid $633 million
in dividends in the fourth quarter and $2.5
billion in dividends for the year. In total, the company
returned $8.9 billion to shareholders
through share repurchases and dividends in fiscal 2023.
|
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
fourth quarter sales includes an approximately $200 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 41-53 in 2022.
|
The company is introducing its outlook for full year 2024, which
reflects near-term macroeconomic uncertainty.
Full Year 2024 Outlook
- Total sales of $84 to
$85 billion
- Comparable sales expected to be down -2 to -3% as compared to
prior year
- Operating income as a percentage of sales (operating margin) of
12.6% to 12.7%
- Interest expense of approximately $1.4
billion
- Effective income tax rate of approximately 25%
- Diluted earnings per share of approximately $12.00 to $12.30
- Capital expenditures of approximately $2
billion
A conference call to discuss fourth quarter 2023 operating
results is scheduled for today, Tuesday,
Feb. 27, 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
Fourth 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 16 million customer
transactions a week in the United
States. With total fiscal year 2023 sales of more than
$86 billion, 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 including customer acceptance of new offerings and
initiatives, 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
|
|
Fiscal Year
Ended
|
|
February 2,
2024
|
|
February 3,
2023
|
|
February 2,
2024
|
|
February 3,
2023
|
Current
Earnings
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
Net
sales
|
$
18,602
|
|
100.00
|
|
$
22,445
|
|
100.00
|
|
$
86,377
|
|
100.00
|
|
$
97,059
|
|
100.00
|
Cost of
sales
|
12,576
|
|
67.60
|
|
15,189
|
|
67.67
|
|
57,533
|
|
66.61
|
|
64,802
|
|
66.77
|
Gross
margin
|
6,026
|
|
32.40
|
|
7,256
|
|
32.33
|
|
28,844
|
|
33.39
|
|
32,257
|
|
33.23
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
3,897
|
|
20.95
|
|
5,131
|
|
22.86
|
|
15,570
|
|
18.02
|
|
20,332
|
|
20.94
|
Depreciation and
amortization
|
442
|
|
2.38
|
|
421
|
|
1.88
|
|
1,717
|
|
1.99
|
|
1,766
|
|
1.82
|
Operating
income
|
1,687
|
|
9.07
|
|
1,704
|
|
7.59
|
|
11,557
|
|
13.38
|
|
10,159
|
|
10.47
|
Interest –
net
|
348
|
|
1.87
|
|
322
|
|
1.43
|
|
1,382
|
|
1.60
|
|
1,123
|
|
1.16
|
Pre-tax
earnings
|
1,339
|
|
7.20
|
|
1,382
|
|
6.16
|
|
10,175
|
|
11.78
|
|
9,036
|
|
9.31
|
Income tax
provision
|
319
|
|
1.72
|
|
425
|
|
1.90
|
|
2,449
|
|
2.83
|
|
2,599
|
|
2.68
|
Net
earnings
|
$
1,020
|
|
5.48
|
|
$
957
|
|
4.26
|
|
$
7,726
|
|
8.95
|
|
$
6,437
|
|
6.63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding –
basic
|
574
|
|
|
|
603
|
|
|
|
582
|
|
|
|
629
|
|
|
Basic earnings per
common share (1)
|
$
1.77
|
|
|
|
$
1.58
|
|
|
|
$
13.23
|
|
|
|
$
10.20
|
|
|
Weighted average common
shares outstanding –
diluted
|
575
|
|
|
|
605
|
|
|
|
584
|
|
|
|
631
|
|
|
Diluted earnings per
common share (1)
|
$
1.77
|
|
|
|
$
1.58
|
|
|
|
$
13.20
|
|
|
|
$
10.17
|
|
|
Cash dividends per
share
|
$
1.10
|
|
|
|
$
1.05
|
|
|
|
$
4.35
|
|
|
|
$
3.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning
of period
|
$
(15,744)
|
|
|
|
$
(13,313)
|
|
|
|
$
(14,862)
|
|
|
|
$
(5,115)
|
|
|
Net earnings
|
1,020
|
|
|
|
957
|
|
|
|
7,726
|
|
|
|
6,437
|
|
|
Cash dividends
declared
|
(633)
|
|
|
|
(633)
|
|
|
|
(2,531)
|
|
|
|
(2,466)
|
|
|
Share
repurchases
|
(280)
|
|
|
|
(1,873)
|
|
|
|
(5,970)
|
|
|
|
(13,718)
|
|
|
Balance at end of
period
|
$
(15,637)
|
|
|
|
$
(14,862)
|
|
|
|
$
(15,637)
|
|
|
|
$
(14,862)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 $1,017
million for the three months ended February 2, 2024, and $954
million for the three months ended February 3, 2023. Net
earnings allocable to common shares used in the basic and diluted
earnings per share calculation were $7,706 million for the fiscal
year ended February 2, 2024, and $6,416 million for the fiscal
year ended February 3, 2023.
|
Lowe's Companies,
Inc. Consolidated Statements of Comprehensive Income
(Unaudited) In Millions, Except Percentage Data
|
|
|
Three Months
Ended
|
|
Fiscal Year
Ended
|
|
February 2,
2024
|
|
February 3,
2023
|
|
February 2,
2024
|
|
February 3,
2023
|
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
|
Amount
|
|
%
Sales
|
Net
earnings
|
$
1,020
|
|
5.48
|
|
$
957
|
|
4.26
|
|
$
7,726
|
|
8.95
|
|
$
6,437
|
|
6.63
|
Foreign currency
translation adjustments – net
of tax
|
—
|
|
—
|
|
209
|
|
0.93
|
|
5
|
|
0.01
|
|
36
|
|
0.04
|
Cash flow hedges – net
of tax
|
(4)
|
|
(0.02)
|
|
(43)
|
|
(0.19)
|
|
(14)
|
|
(0.02)
|
|
309
|
|
0.32
|
Other
|
2
|
|
0.01
|
|
2
|
|
0.01
|
|
2
|
|
—
|
|
(2)
|
|
—
|
Other comprehensive
(loss)/income
|
(2)
|
|
(0.01)
|
|
168
|
|
0.75
|
|
(7)
|
|
(0.01)
|
|
343
|
|
0.36
|
Comprehensive
income
|
$
1,018
|
|
5.47
|
|
$
1,125
|
|
5.01
|
|
$
7,719
|
|
8.94
|
|
$
6,780
|
|
6.99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lowe's Companies,
Inc. Consolidated Balance Sheets (Unaudited) In
Millions, Except Par Value Data
|
|
|
|
|
|
|
|
|
February 2,
2024
|
|
February 3,
2023
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
921
|
|
$
1,348
|
Short-term
investments
|
|
307
|
|
384
|
Merchandise inventory
– net
|
|
16,894
|
|
18,532
|
Other current
assets
|
|
949
|
|
1,178
|
Total current
assets
|
|
19,071
|
|
21,442
|
Property, less
accumulated depreciation
|
|
17,653
|
|
17,567
|
Operating lease
right-of-use assets
|
|
3,733
|
|
3,518
|
Long-term
investments
|
|
252
|
|
121
|
Deferred income taxes
– net
|
|
248
|
|
250
|
Other
assets
|
|
838
|
|
810
|
Total
assets
|
|
$
41,795
|
|
$
43,708
|
|
|
|
|
|
Liabilities and
shareholders' deficit
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Short-term
borrowings
|
|
$
—
|
|
$
499
|
Current maturities of
long-term debt
|
|
537
|
|
585
|
Current operating
lease liabilities
|
|
487
|
|
522
|
Accounts
payable
|
|
8,704
|
|
10,524
|
Accrued compensation
and employee benefits
|
|
954
|
|
1,109
|
Deferred
revenue
|
|
1,408
|
|
1,603
|
Income taxes
payable
|
|
33
|
|
1,181
|
Other current
liabilities
|
|
3,445
|
|
3,488
|
Total current
liabilities
|
|
15,568
|
|
19,511
|
Long-term debt,
excluding current maturities
|
|
35,384
|
|
32,876
|
Noncurrent operating
lease liabilities
|
|
3,737
|
|
3,512
|
Deferred revenue –
Lowe's protection plans
|
|
1,225
|
|
1,201
|
Other
liabilities
|
|
931
|
|
862
|
Total
liabilities
|
|
56,845
|
|
57,962
|
|
|
|
|
|
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
–
574 million and 601 million, respectively
|
|
287
|
|
301
|
Accumulated
deficit
|
|
(15,637)
|
|
(14,862)
|
Accumulated other
comprehensive income
|
|
300
|
|
307
|
Total shareholders'
deficit
|
|
(15,050)
|
|
(14,254)
|
Total liabilities
and shareholders' deficit
|
|
$
41,795
|
|
$
43,708
|
|
|
|
|
|
Lowe's Companies,
Inc. Consolidated Statements of Cash Flows
(Unaudited) In Millions
|
|
|
Fiscal Year
Ended
|
|
February 2,
2024
|
|
February 3,
2023
|
Cash flows from
operating activities:
|
|
|
|
Net earnings
|
$
7,726
|
|
$
6,437
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
1,923
|
|
1,981
|
Noncash lease
expense
|
499
|
|
530
|
Deferred income
taxes
|
6
|
|
(239)
|
Asset impairment and
loss on property – net
|
83
|
|
2,118
|
(Gain)/loss on sale of
business
|
(79)
|
|
421
|
Share-based payment
expense
|
210
|
|
223
|
Changes in operating
assets and liabilities:
|
|
|
|
Merchandise inventory
– net
|
1,637
|
|
(2,594)
|
Other operating
assets
|
182
|
|
56
|
Accounts
payable
|
(1,820)
|
|
(549)
|
Deferred
revenue
|
(170)
|
|
(183)
|
Other operating
liabilities
|
(2,057)
|
|
388
|
Net cash provided by
operating activities
|
8,140
|
|
8,589
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Purchases of
investments
|
(1,785)
|
|
(1,189)
|
Proceeds from
sale/maturity of investments
|
1,722
|
|
1,174
|
Capital
expenditures
|
(1,964)
|
|
(1,829)
|
Proceeds from sale of
property and other long-term assets
|
53
|
|
45
|
Proceeds from sale of
business
|
100
|
|
491
|
Other – net
|
(27)
|
|
(1)
|
Net cash used in
investing activities
|
(1,901)
|
|
(1,309)
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Net change in
commercial paper
|
(499)
|
|
499
|
Net proceeds from
issuance of debt
|
2,983
|
|
9,667
|
Repayment of
debt
|
(601)
|
|
(867)
|
Proceeds from issuance
of common stock under share-based payment plans
|
141
|
|
151
|
Cash dividend
payments
|
(2,531)
|
|
(2,370)
|
Repurchases of common
stock
|
(6,138)
|
|
(14,124)
|
Other – net
|
(21)
|
|
(5)
|
Net cash used in
financing activities
|
(6,666)
|
|
(7,049)
|
|
|
|
|
Effect of exchange
rate changes on cash
|
—
|
|
(16)
|
|
|
|
|
Net (decrease)/increase
in cash and cash equivalents
|
(427)
|
|
215
|
Cash and cash
equivalents, beginning of period
|
1,348
|
|
1,133
|
Cash and cash
equivalents, end of period
|
$
921
|
|
$
1,348
|
|
|
|
|
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 February 3, 2023. 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 to the
fourth 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 fourth quarter of fiscal 2022, the Company recognized
pre-tax transaction costs totaling $441
million, consisting of the loss on the sale and other
closing costs associated with the sale 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
|
|
February 3,
2023
|
|
Pre-Tax
Earnings
|
|
Tax1
|
|
Net
Earnings
|
Diluted earnings per
share, as reported
|
|
|
|
|
$
1.58
|
Non-GAAP
adjustments – per share impacts
|
|
|
|
|
|
Canadian retail
business transaction
|
0.73
|
|
(0.03)
|
|
0.70
|
Adjusted diluted
earnings per share
|
|
|
|
|
$
2.28
|
|
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.