Mooresville, NC, February 27, 2006--Lowe's today reported fourth quarter net earnings that increased 36.8 percent to $695 million over the same quarter of the prior year.
Diluted earnings per share increased 35.9 percent to $0.87 from $0.64 in the fourth quarter of 2004.
Sales for the fourth quarter increased 26.4 percent to $10.8 billion, up from $8.55 billion for the 13-week period ended January 28, 2005. Comparable store sales for the fourth quarter increased 7.8 percent versus a comparable 14-week period.
Wall Street had forecast earnings per share of $0.80 on sales of $10.44 billion.
For fiscal 2005, net earnings grew 27.3 percent to $2.77 billion while diluted earnings per share increased 27.7 percent to $3.46. For the year sales increased 18.6 percent to $43.2 billion. Comparable store sales increased 6.1 percent for fiscal 2005.
"Our strong fourth quarter and fiscal year results represent a focus on execution and a culture of customer service that solidifies Lowe's competitive position across the country," explained Robert A. Niblock, Lowe's chairman, president and CEO. "Amid the challenges of a weather-affected 2005 spring selling season and the devastation caused by the most active hurricane season on record, we were ready to serve customers and provide products, services and solutions to meet their home improvement needs.
"Our Installed Sales, Special Order Sales and Commercial Business Customer initiatives continue to deliver great results and remain key drivers of our performance, helping us achieve 2005 comparable store sales in excess of six percent for the third consecutive year," Niblock added. "As we continue to monitor the changing economic environment, including housing-related metrics, employment, real wage growth and demographic trends, we have confidence in our future performance as the outlook for home improvement spending remains strong. Our more than 185,000 employees and over 1,200 best-in-class stores are a true competitive advantage, and part of the reason Lowe's was recently recognized as the Best Managed Company in retail by Forbes magazine.
During the quarter, Lowe's opened 63 new stores and reopened one store temporarily closed as a result of hurricane Katrina. As of February 3, 2006, Lowe's operated 1,234 stores in 49 states representing 140.1 million square feet of retail selling space, a 13.2 percent increase over last year.
Fiscal 2006 annual and fourth quarter comparisons will be negatively impacted by a 52- vs. 53-week and 13- vs. 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. Our 2006 guidance contemplates these factors.
First Quarter 2006 (comparisons to first quarter 2005)
- The company expects to open 24 new stores reflecting square footage growth of approximately 13 percent
- Total sales are expected to increase 19 to 20 percent
- The company expects to report a comparable store sales increase of 5 to 7 percent
- Operating margin (defined as gross margin less SG&A and depreciation) is expected to increase 20 to 30 basis points
- Store opening costs are expected to be approximately $18 million
- Diluted earnings per share of $0.92 to $0.94 are expected
- Lowe's first quarter ends on May 5, 2006 with operating results to be publicly released on Monday, May 22, 2006
Second Quarter 2006 (comparisons to second quarter 2005)
- Total sales are expected to increase 13 to 14 percent
- Diluted earnings per share of $1.22 to $1.25 are expected
- Lowe's second quarter ends on August 4, 2006 with operating results to be publicly released on Monday, August 21, 2006.
