MOORESVILLE, N.C. - Lowe's Companies, Inc. (NYSE: LOW), the world's second largest home improvement retailer, today reported net earnings of $938 million for the quarter ended August 1, 2008, a 7.9 percent decline from the same period a year ago. Diluted earnings per share declined 4.5 percent to $0.64 (consensus was $0.56) from $0.67 in the second quarter of 2007. For the six months ended August 1, 2008, net earnings declined 12.1 percent to $1.54 billion while diluted earnings per share declined 8.7 percent to $1.05.
Sales for the quarter increased 2.4 percent to $14.5 billion, up from $14.2 billion in the second quarter of 2007. For the six months ended August 1, 2008, sales increased 0.7 percent to $26.5 billion. Comparable store sales for the second quarter declined 5.3 percent and declined 6.7 percent in the first half of 2008.
"Our sales results for the quarter, while better than our forecast, reflect the realities of the continuing macro economic pressures on our industry," commented Robert A. Niblock, Lowe's chairman and CEO. "We saw relative strength in our seasonal sales as homeowners welcomed back spring and restored lawns and outdoor landscaping following the effects of last year's drought in much of the country. In addition, we believe our second quarter sales benefited from the economic impact of the fiscal stimulus tax rebates. Unfortunately, weakness in bigger ticket projects continues, particularly in markets most impacted by the housing downturn.
Sales for the quarter increased 2.4 percent to $14.5 billion, up from $14.2 billion in the second quarter of 2007. For the six months ended August 1, 2008, sales increased 0.7 percent to $26.5 billion. Comparable store sales for the second quarter declined 5.3 percent and declined 6.7 percent in the first half of 2008.
"Our sales results for the quarter, while better than our forecast, reflect the realities of the continuing macro economic pressures on our industry," commented Robert A. Niblock, Lowe's chairman and CEO. "We saw relative strength in our seasonal sales as homeowners welcomed back spring and restored lawns and outdoor landscaping following the effects of last year's drought in much of the country. In addition, we believe our second quarter sales benefited from the economic impact of the fiscal stimulus tax rebates. Unfortunately, weakness in bigger ticket projects continues, particularly in markets most impacted by the housing downturn.
Lowe's Business Outlook
Third Quarter 2008 (comparisons to third quarter 2007)
>The company expects to open approximately 38 new stores reflecting square footage growth of approximately 10 percent
>Total sales are expected to increase 1 to 2 percent
>The company expects comparable store sales to decline 5 to 7 percent
>Earnings before interest and taxes as a percentage of sales (operating margin) is expected to decline approximately 290 basis points driven by the cycling of last year's $112 million reduction in self-insurance reserves for workers compensation and general liability claims in addition to payroll, fixed cost and depreciation deleverage
>Store opening costs are expected to be approximately $34 million
>Diluted earnings per share of $0.27 to $0.31 are expected
>Lowe's third quarter ends on October 31, 2008 with operating results to be publicly released on Monday, November 17, 2008
Third Quarter 2008 (comparisons to third quarter 2007)
>The company expects to open approximately 38 new stores reflecting square footage growth of approximately 10 percent
>Total sales are expected to increase 1 to 2 percent
>The company expects comparable store sales to decline 5 to 7 percent
>Earnings before interest and taxes as a percentage of sales (operating margin) is expected to decline approximately 290 basis points driven by the cycling of last year's $112 million reduction in self-insurance reserves for workers compensation and general liability claims in addition to payroll, fixed cost and depreciation deleverage
>Store opening costs are expected to be approximately $34 million
>Diluted earnings per share of $0.27 to $0.31 are expected
>Lowe's third quarter ends on October 31, 2008 with operating results to be publicly released on Monday, November 17, 2008
Fiscal Year 2008 (comparisons to fiscal year 2007)
>The company expects to open approximately 120 stores in 2008 reflecting total square footage growth of 7 to 8 percent
>Total sales are expected to increase approximately 1 percent
>The company expects comparable store sales to decline 6 to 7 percent
>Earnings before interest and taxes as a percentage of sales (operating margin) is expected to decline approximately 180 basis points
>Store opening costs are expected to be approximately $97 million
>Diluted earnings per share of $1.48 to $1.56 are expected for the fiscal year ending January 30, 2009
>The company expects to open approximately 120 stores in 2008 reflecting total square footage growth of 7 to 8 percent
>Total sales are expected to increase approximately 1 percent
>The company expects comparable store sales to decline 6 to 7 percent
>Earnings before interest and taxes as a percentage of sales (operating margin) is expected to decline approximately 180 basis points
>Store opening costs are expected to be approximately $97 million
>Diluted earnings per share of $1.48 to $1.56 are expected for the fiscal year ending January 30, 2009
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