Le Lézard
Classified in: Business
Subjects: ERN, ERP

LOWE'S REPORTS SECOND QUARTER 2022 SALES AND EARNINGS RESULTS


? Consolidated Comparable Sales Decreased 0.3%; U.S. Comparable Sales Increased 0.2% ?
? Second Quarter Diluted EPS of $4.67 ?

MOORESVILLE, N.C., Aug. 17, 2022 /PRNewswire/ -- Lowe's Companies, Inc. (NYSE: LOW) today reported net earnings of $3.0 billion, in line with prior-year results, and diluted earnings per share (EPS) of $4.67 for the quarter ended July 29, 2022, compared to diluted EPS of $4.25 in the second quarter of 2021. 

Total sales for the second quarter were $27.5 billion compared to $27.6 billion in the second quarter of 2021, and comparable sales decreased 0.3%. Comparable sales for the U.S. home improvement business increased 0.2% for the second quarter. DIY sales were impacted by the shortened spring and lower demand in certain discretionary categories, which was partially offset by a 13% increase in Pro customer sales.

"I am pleased that our team drove operating margin improvement and effectively managed inventory despite lower-than-expected sales ? a clear reflection of our relentless focus on operating discipline and productivity," commented Marvin R. Ellison, Lowe's chairman, president and CEO. "Our results in the first half were disproportionately impacted by our 75% DIY customer mix, which was partially offset by our double-digit Pro growth for the ninth consecutive quarter.  Despite continued macro uncertainty, we remain confident in the long-term strength of the home improvement market and our ability to take share. To help our hourly front-line associates during this period of high inflation, we are awarding an incremental bonus of $55 million. I'd like to thank our associates for their continued hard work and dedication."

Capital Allocation
With a disciplined focus on its best-in-class capital allocation program, the company continues to create sustainable value for its shareholders. During the quarter, the company repurchased approximately 21.6 million shares for $4.0 billion, and it paid $524 million in dividends.

As of July 29, 2022, Lowe's operated 1,969 home improvement and hardware stores in the U.S. and Canada representing 208 million square feet of retail selling space, and it serviced approximately 212 dealer-owned stores.

Lowe's Business Outlook

The company now expects full year 2022 total and comparable sales toward the bottom end of its outlook range, and expects operating income and diluted EPS toward the top end of its outlook range. This reflects first half sales performance and expectations for continued Pro strength and improving DIY trends. It also reflects the company's disciplined expense management and benefits of its productivity initiatives.     

Full Year 2022 Outlook -- a 53-week Year (comparisons to full year 2021 -- a 52-week year)

A conference call to discuss second quarter 2022 operating results is scheduled for today, Wednesday, August 17, 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 Second Quarter 2022 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.

Lowe's Companies, Inc. (NYSE: LOW) is a FORTUNE® 50 home improvement company serving approximately 19 million customer transactions a week in the United States and Canada. With fiscal year 2021 sales of over $96 billion, Lowe's and its related businesses operate or service nearly 2,200 home improvement and hardware stores and employ over 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, 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, 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


704-881-4272


kate.pearlman@lowes.com


steve.j.salazar@lowes.com

 

1 Return on Invested Capital (ROIC) is calculated using a non-GAAP financial measure. 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 and the information is not available without unreasonable effort.

 

Lowe's Companies, Inc.
Consolidated Statements of Current Earnings and (Accumulated Deficit)/Retained Earnings (Unaudited)
In Millions, Except Per Share and Percentage Data



Three Months Ended


Six Months Ended


July 29, 2022


July 30, 2021


July 29, 2022


July 30, 2021

Current Earnings

Amount


% Sales


Amount


% Sales


Amount


% Sales


Amount


% Sales

Net sales

$  27,476


100.00


$  27,570


100.00


$  51,135


100.00


$  51,993


100.00

Cost of sales

18,343


66.76


18,258


66.22


33,952


66.40


34,551


66.45

Gross margin

9,133


33.24


9,312


33.78


17,183


33.60


17,442


33.55

Expenses:
















Selling, general and administrative

4,455


16.22


4,693


17.02


8,758


17.12


9,187


17.67

Depreciation and amortization

449


1.63


409


1.49


894


1.75


800


1.54

Operating income

4,229


15.39


4,210


15.27


7,531


14.73


7,455


14.34

Interest ? net

264


0.96


216


0.78


507


0.99


427


0.82

Pre-tax earnings

3,965


14.43


3,994


14.49


7,024


13.74


7,028


13.52

Income tax provision

973


3.54


976


3.54


1,699


3.33


1,688


3.25

Net earnings

$    2,992


10.89


$    3,018


10.95


$    5,325


10.41


$    5,340


10.27

































Weighted average common shares outstanding ?
     basic

638




705




649




711



Basic earnings per common share (1)

$      4.68




$      4.27




$      8.18




$      7.48



Weighted average common shares outstanding ?
     diluted

639




707




651




713



Diluted earnings per common share (1)

$      4.67




$      4.25




$      8.16




$      7.46



Cash dividends per share

$      1.05




$      0.80




$      1.85




$      1.40



















(Accumulated Deficit)/Retained Earnings
















Balance at beginning of period

$   (7,367)




$         98




$   (5,115)




$    1,117



Net earnings

2,992




3,018




5,325




5,340



Cash dividends declared

(666)




(563)




(1,190)




(993)



Share repurchases

(3,854)




(3,013)




(7,915)




(5,924)



Balance at end of period

$   (8,895)




$      (460)




$   (8,895)




$      (460)



















(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 $2,983 million for the three months ended July 29, 2022, and $3,007 million for the three months ended
July 30, 2021.  Net earnings allocable to common shares used in the basic and diluted earnings per share calculation were $5,308 million
for the six months ended July 29, 2022, and $5,318 million for the six months ended July 30, 2021.

 

Lowe's Companies, Inc.
Consolidated Statements of Comprehensive Income (Unaudited)
In Millions, Except Percentage Data



Three Months Ended


Six Months Ended


July 29, 2022


July 30, 2021


July 29, 2022


July 30, 2021


Amount


% Sales


Amount


% Sales


Amount


% Sales


Amount


% Sales

Net earnings

$    2,992


10.89


$    3,018


10.95


$    5,325


10.41


$    5,340


10.27

Foreign currency translation adjustments ? net
of tax

12


0.05


(44)


(0.17)


(5)


(0.02)


58


0.11

Cash flow hedges ? net of tax

(38)


(0.14)


(9)


(0.03)


181


0.36


15


0.03

Other

(1)


?


(1)


?


(3)


0.01


(2)


?

Other comprehensive (loss)/income

(27)


(0.09)


(54)


(0.20)


173


0.35


71


0.14

Comprehensive income

$    2,965


10.80


$    2,964


10.75


$    5,498


10.76


$    5,411


10.41

















 

Lowe's Companies, Inc.
Consolidated Balance Sheets (Unaudited)
In Millions, Except Par Value Data




July 29, 2022


July 30, 2021


January 28, 2022

Assets







Current assets:







Cash and cash equivalents


$                    1,482


$                    4,835


$                    1,133

Short-term investments


450


1,420


271

Merchandise inventory ? net


19,329


17,322


17,605

Other current assets


1,406


1,506


1,051

Total current assets


22,667


25,083


20,060

Property, less accumulated depreciation


18,713


19,031


19,071

Operating lease right-of-use assets


4,158


3,820


4,108

Long-term investments


56


225


199

Deferred income taxes ? net


104


221


164

Other assets


1,027


1,024


1,038

Total assets


$                  46,725


$                  49,404


$                  44,640








Liabilities and shareholders' deficit







Current liabilities:







Short-term borrowings


$                         ?


$                    1,000


$                         ?

Current maturities of long-term debt


121


1,344


868

Current operating lease liabilities


652


557


636

Accounts payable


12,631


12,011


11,354

Accrued compensation and employee benefits


1,227


1,331


1,561

Deferred revenue


1,968


2,041


1,914

Other current liabilities


3,767


3,380


3,335

Total current liabilities


20,366


21,664


19,668

Long-term debt, excluding current maturities


28,763


21,967


23,859

Noncurrent operating lease liabilities


4,069


3,841


4,021

Deferred revenue ? Lowe's protection plans


1,169


1,097


1,127

Other liabilities


800


1,010


781

Total liabilities


55,167


49,579


49,456








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 ? 631 million, 699 million, and 670 million shares,
     respectively


316


350


335

Capital in excess of par value


?


?


?

Accumulated deficit


(8,895)


(460)


(5,115)

Accumulated other comprehensive income/(loss)


137


(65)


(36)

Total shareholders' deficit


(8,442)


(175)


(4,816)

Total liabilities and shareholders' deficit


$                  46,725


$                  49,404


$                  44,640








 

Lowe's Companies, Inc.
Consolidated Statements of Cash Flows (Unaudited)
In Millions



Six Months Ended


July 29, 2022


July 30, 2021

Cash flows from operating activities:




Net earnings

$                        5,325


$                        5,340

Adjustments to reconcile net earnings to net cash provided by operating activities:




Depreciation and amortization

1,007


907

Noncash lease expense

273


252

Deferred income taxes

?


110

Loss on property and other assets ? net

32


1

Share-based payment expense

110


115

Changes in operating assets and liabilities:




Merchandise inventory ? net

(1,728)


(1,096)

Other operating assets

(120)


(203)

Accounts payable

1,279


1,115

Deferred revenue

97


511

Other operating liabilities

(263)


(139)

Net cash provided by operating activities

6,012


6,913





Cash flows from investing activities:




Purchases of investments

(330)


(1,635)

Proceeds from sale/maturity of investments

290


692

Capital expenditures

(687)


(846)

Proceeds from sale of property and other long-term assets

19


78

Other ? net

(1)


(134)

Net cash used in investing activities

(709)


(1,845)





Cash flows from financing activities:




Net proceeds from issuance of debt

4,964


2,988

Repayment of debt

(799)


(568)

Proceeds from issuance of common stock under share-based payment plans

72


63

Cash dividend payments

(1,061)


(870)

Repurchases of common stock

(8,128)


(6,174)

Other ? net

(2)


(366)

Net cash used in financing activities

(4,954)


(4,927)





Effect of exchange rate changes on cash

?


4





Net increase in cash and cash equivalents

349


145

Cash and cash equivalents, beginning of period

1,133


4,690

Cash and cash equivalents, end of period

$                        1,482


$                        4,835





 

SOURCE Lowe's Companies, Inc.


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