Mooresville, NC, May 21, 2007--Lowe's in the first quarter reported net earnings of $739 million, a 12.1 percent decline versus the same period a year ago. Diluted earnings per share declined 9.4 percent to $0.48 from $0.53 in the first quarter of 2006.
Analysts had forecast EPS in the quarter of $0.49.
Sales for the quarter increased 2.1% percent to $12.2 billion, up from $11.9 billion in the first quarter of 2006. Comparable store sales for the first quarter declined 6.3 percent.
"Multiple factors, including a difficult housing market in many areas, tough comparisons to hurricane rebuilding efforts, and significant lumber and plywood price deflation, continued to create a challenging sales environment in the first quarter," commented Robert A. Niblock, Lowe's chairman and CEO. "Those anticipated factors were compounded by mixed weather during the quarter. Mild temperatures and solid sales in March were more than offset by record cold and wet weather across much of the U.S. during the first two weeks of April. While the weather improved in the second half of the month, the drag created by the first two weeks substantially contributed to our sales shortfall to plan.
"We continued to gain market share during the quarter despite the challenging sales environment and credit that success to our commitment to providing great stores and great products as well as our employees' commitment to customer service. Easier comparisons in the back half of the year give us continued confidence that our sales performance will improve as the year progresses."
During the quarter, Lowe's opened 15 new stores. As of May 4, 2007, Lowe's operated 1,400 stores in 49 states representing 158.7 million square feet of retail selling space, an 11.2 percent increase over last year. A conference call to discuss first quarter 2007 operating results is scheduled for today (Monday, May 21) at 9:00 a.m. EDT. 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 http://www.Lowes.com/investor and clicking on Lowe's First Quarter 2007 Earnings Conference Call Webcast. A replay of the call will be archived on Lowes.com until August 19, 2007.
Lowe's Business Outlook
Second Quarter 2007 (comparisons to second quarter 2006)
-- The company expects to open 26 new stores reflecting square footage
growth of approximately 11 percent
-- Total sales are expected to increase 6 to 7 percent
-- The company expects to report a comparable store sales decline of 1 to
3 percent
-- Operating margin (defined as gross margin less SG&A and depreciation)
is expected to decline approximately 40 basis points
-- Store opening costs are expected to be approximately $35 million
-- Diluted earnings per share of $0.62 to $0.64 are expected
-- Lowe's second quarter ends on August 3, 2007 with operating results to
be publicly released on Monday, August 20, 2007
Fiscal Year 2007 (comparisons to fiscal year 2006)
-- The company expects to open 150 to 160 stores in 2007 reflecting total
square footage growth of approximately 11 percent
-- Total sales are expected to increase approximately 7 percent
-- The company expects comparable store sales to decline 1 to 2 percent
-- Operating margin (defined as gross margin less SG&A and depreciation)
is expected to decline 70 to 80 basis points
-- Store opening costs are expected to be $140 to $145 million
-- Diluted earnings per share of $1.99 to $2.03 are expected for the
fiscal year ending February 1, 2008
