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20 February 2009, by admin
Lowe’s Reports Fourth Quarter and Fiscal Year 2008 Sales and Earnings Results
MOORESVILLE, N.C., Feb. 20 /PRNewswire-FirstCall/ — Lowe’s Companies, Inc. (NYSE: LOW), the world’s second largest home improvement retailer, today reported net earnings of $162 million for the quarter ended January 30, 2009, a 60.3 percent decline from the same period a year ago. Diluted earnings per share declined 60.7 percent to $0.11 from $0.28 in the fourth quarter of 2007. For the fiscal year ended January 30, 2009, net earnings declined 21.9 percent to $2.20 billion while diluted earnings per share declined 19.9 percent to $1.49.
Sales for the quarter declined 3.8 percent to $9.98 billion. For the fiscal year ended January 30, 2009, sales declined 0.1 percent to $48.2 billion. Comparable store sales declined 9.9 percent for the fourth quarter and 7.2 percent for fiscal 2008.
“The economic pressures on consumers intensified in the fourth quarter, resulting in a further decline in consumer confidence and dramatic reductions in consumer spending,” commented Robert A. Niblock, Lowe’s chairman and CEO. “As a result, our comparable store sales for the quarter remained weak and fell at the low end of our expectations. However, in this challenging sales environment and throughout this prolonged industry downturn, we are continuing to capture market share, which is evidence of our compelling product offering and commitment to customer service.”
During the fourth quarter holiday season, a period when Lowe’s competes with a broader group of retailers for customer traffic, the competition for sales was intense. Reacting to the extreme promotional environment and to the sharp decline in consumer spending, the company chose to be more aggressive than planned with seasonal merchandise markdowns. This pressured gross margin, but helped improve the company’s inventory position heading into fiscal 2009. While the competition for sales remains high, and the state of the consumer is certainly still in question, the company believes many of the pressures on gross margin were unique to promotional activity during the holiday season and expects those pressures to abate in the first quarter.
“Through disciplined expense control, we delivered respectable earnings for the quarter and fiscal 2008,” Niblock added. “We have made significant progress in refining our cost structure during the three-year downturn in our industry and have managed our staffing, both in our stores and in our corporate office, to match the slowing sales environment. While we have a conservative plan for 2009, we continue to look critically at all expenses and have the flexibility to further reduce our expense structure should sales be weaker than expected. In the current environment our goal remains to balance expense control with our commitment to customer service.”
During the quarter, Lowe’s opened 33 new stores. As of January 30, 2009, Lowe’s operated 1,649 stores in the United States and Canada representing 186.6 million square feet of retail selling space, a 7.2 percent increase over last year.
A conference call to discuss fourth quarter and fiscal year 2008 operating results is scheduled for today (Friday, February 20) at 9:00 am EST. Please dial 888-817-4020 (international callers dial 706-679-8762) to participate. A webcast of the call will take place simultaneously and can be accessed by visiting Lowe’s website at www.Lowes.com/investor and clicking on Lowe’s Fourth Quarter and Fiscal Year 2008 Earnings Conference Call Webcast. A replay of the call will be archived on Lowes.com until May 17, 2009.
Lowe’s Business Outlook
First Quarter 2009 (comparisons to first quarter 2008)
— The company expects to open approximately 21 new stores reflecting
square footage growth of approximately 7 percent
— Total sales are expected to range from a decline of 3 percent to an
increase of 1 percent
— The company expects comparable store sales to decline 6 to 10 percent
— Earnings before interest and taxes as a percentage of sales (operating
margin) is expected to decline approximately 310 basis points driven by
payroll, fixed cost and depreciation deleverage
— Store opening costs are expected to be approximately $16 million
— Diluted earnings per share of $0.23 to $0.27 are expected
— Lowe’s first quarter ends on May 1, 2009 with operating results to be
publicly released on Monday, May 18, 2009
Fiscal Year 2009 (comparisons to fiscal year 2008)
— The company expects to open 60 to 70 stores in 2009 reflecting total
square footage growth of approximately 4 percent
— Total sales are expected to range from a decline of 2 percent to an
increase of 2 percent
— The company expects comparable store sales to decline 4 to 8 percent
— Earnings before interest and taxes as a percentage of sales (operating
margin) is expected to decline approximately 170 basis points
— Store opening costs are expected to be approximately $50 million
— Diluted earnings per share of $1.04 to $1.20 are expected for the
fiscal year ending January 29, 2010
Disclosure Regarding Forward-Looking Statements
This news release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”). Statements of the company’s expectations for sales growth, comparable store sales, earnings and performance, capital expenditures, store openings, the housing market, the home improvement industry, demand for services, and any statement of an assumption underlying any of the foregoing, constitute “forward-looking statements” under the Act. Although the company believes that the expectations, opinions, projections, and comments reflected in its forward-looking statements are reasonable, it can give no assurance that such statements will prove to be correct. A wide variety of potential risks, uncertainties, and other factors could materially affect our ability to achieve the results expressed or implied by our forward-looking statements including, but not limited to, changes in general economic conditions, such as rising unemployment, interest rate and currency fluctuations, higher fuel and other energy costs, slower growth in personal income, changes in consumer spending, the availability of consumer credit and mortgage financing, changes in the rate of housing turnover, inflation or deflation of commodity prices and other factors which can negatively affect our customers, as well as our ability to: (i) respond to adverse trends in the housing industry and the level of repairs, remodeling, and additions to existing homes, as well as general reduction in commercial building activity; (ii) secure, develop, and otherwise implement new technologies and processes designed to enhance our efficiency and competitiveness; (iii) attract, train, and retain highly- qualified associates; (iv) locate, secure, and successfully develop new sites for store development particularly in major metropolitan markets; (v) respond to fluctuations in the prices and availability of services, supplies, and products; (vi) respond to the growth and impact of competition; (vii) address legal and regulatory developments; and (viii) respond to unanticipated weather conditions that could adversely affect sales. For more information about these and other risks and uncertainties that we are exposed to, you should read the “Risk Factors” included in our Annual Report on Form 10-K to the United States Securities and Exchange Commission and the description of material changes, if any, in those “Risk Factors” included in our Quarterly Reports on Form 10-Q.
The forward-looking statements contained in this news release speak only as of the date of this release and the company does not assume any obligation to update any such statements.
With fiscal year 2008 sales of $48.2 billion, Lowe’s Companies, Inc. is a FORTUNE(R) 50 company that serves approximately 14 million customers a week at more than 1,650 home improvement stores in the United States and Canada. Founded in 1946 and based in Mooresville, N.C., Lowe’s is the second-largest home improvement retailer in the world. For more information, visit Lowes.com.
SOURCE Lowe’s Companies, Inc.
http://www.lowes.com
Categories: Home Improvement, News
