Mooresville, NC, November 20, 2006--Lowe's reported net earnings in the third quarter of $716 million for the quarter ended November 3, 2006, a 10.8 percent increase over the same period a year ago. Diluted earnings per share increased 15.0 percent to $0.46 from $0.40 in the third quarter of 2005.
Analysts were expecting earnings per share in the quarter of $0.43
Sales for the quarter increased 5.8 percent to $11.2 billion, up from $10.6 billion in the third quarter of 2005. Comparable store sales for the third quarter declined 4.0 percent.
For the nine months ended November 3, 2006, net earnings grew 20.3 percent to $2.49 billion while diluted earnings per share increased 23.3 percent to $1.59. Sale for the nine month period increased 12.6 percent to $36.5 billion.
For the first nine months of 2006, comparable store sales increased 1.7 percent.
"The combined effects of a slowing housing market in parts of the U.S., significant deflation in certain commodity categories, and a difficult comparison to last year's hurricane recovery and rebuilding efforts have created a challenging sales environment for home improvement," commented Robert A. Niblock, Lowe's chairman, president and CEO. "Despite these challenges, we continue to gain market share in key product categories and achieved industry-leading share gains across the total store according to third-party estimates. We continue to see solid performance from our new stores and remain focused on delivering the superior service customers expect from Lowe's.
"We believe many external headwinds will exist through the balance of the year and the first half of fiscal 2007, but as we look to the future, we are confident that solid longer-term drivers of our industry remain," Niblock added. "We will capitalize on this opportunity through ongoing new store expansion and continued investment in existing stores through product resets and re-merchandising projects, while actively managing controllable expenses. We remain focused on delivering the best stores, products and customer service in the industry to ensure Lowe's is the first choice for home improvement."
During the quarter, Lowe's opened 49 new stores. As of November 3, 2006, Lowe's operated 1,330 stores in 49 states representing 150.8 million square feet of retail selling space, a 13.4 percent increase over last year.
A conference call to discuss third quarter 2006 operating results is scheduled for today (Monday, November 20) at 9:00 a.m. EST. Please dial 888-817-4020 (international callers dial 706-679-3245) 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 Third Quarter 2006 Earnings Conference Call Webcast. A replay of the call will be archived on Lowes.com until February 25, 2007.
Fiscal 2006 annual and fourth quarter comparisons will be negatively impacted by a 52 versus 53 week and 13 versus 14 week comparison, respectively. In addition, our 2006 quarterly comparisons will be impacted by a shift in comparable weeks to 2005. This week shift positively impacts the first quarter and is offset by negative impacts in the second and fourth quarters. The week shift does not impact comparable store sales results. Our 2006 guidance contemplates these factors.
Fourth Quarter 2006 (comparisons to fourth quarter 2005 - a 14-week quarter)
- The company expects to open 58 new stores reflecting square footage
growth of approximately 12 percent
- Total sales are expected to decline approximately 4 percent (13 weeks
versus 14 weeks in 2005)
- The company expects to report a comparable store sales decline of 4 to
6 percent
- Operating margin (defined as gross margin less SG&A and deprecia
