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Homebuilder Stocks News - Lowe's Reports First Quarter Sales and Earnings Results
MOORESVILLE, N.C., May 18 Lowe's Companies, Inc. (NYSE: LOW), the world's second-largest home improvement retailer, today reported net earnings of $476 million for the quarter ended May 1, 2009, a 21.6 percent decline versus the same period a year ago. Diluted earnings per share declined 22.0 percent to $0.32 from $0.41 in the first quarter of 2008.
Sales for the quarter declined 1.5 percent to $11.8 billion, down from $12.0 billion in the first quarter of 2008. Comparable store sales for the first quarter declined 6.6 percent.
"Despite the difficult external environment, Lowe's strong commitment to customer service and a compelling product offering led to continued market share gains in the first quarter and helped deliver sales within our guidance range," commented Robert A. Niblock, Lowe's chairman and CEO. "In addition, solid gross margin growth combined with appropriate expense management allowed us to deliver earnings per share above our guidance for the quarter.
"The economic pressures on consumers remain intense, and bigger ticket projects continue to be postponed as wary home improvement consumers watch the economic climate and housing market dynamics very closely," Niblock added. "But, as spring arrived, we saw relative strength in smaller, outdoor projects.
"In recent weeks we have seen consumer confidence improve, housing turnover show signs of a bottom in certain markets, and home prices slow their decline," Niblock continued. "These are all positive signs for the stabilization and ultimate recovery of home improvement industry sales, but since many of these variables remain at or near historic lows, we will continue to plan conservatively and manage expenses appropriately. Lowe's remains focused on positioning the company for the future while maximizing opportunities presented today."
During the quarter, Lowe's opened 21 new stores. As of May 1, 2009, Lowe's operated 1,670 stores in the United States and Canada representing 188.8 million square feet of retail selling space, a 7.0 percent increase over last year.
A conference call to discuss first quarter 2009 operating results is scheduled for today (Monday, May 18) at 9:00 am 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 www.Lowes.com/investor and clicking on Lowe's First Quarter 2009 Earnings Conference Call Webcast. A replay of the call will be archived on Lowes.com until August 16, 2009.
Lowe's Business Outlook
Second Quarter 2009 (comparisons to second quarter 2008)
- The company expects to open approximately 18 new stores reflecting square footage growth of approximately 7 percent
- Total sales are expected to range from a decline of 2 percent to an increase of 1 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 160 basis points driven by payroll, fixed cost and depreciation deleverage
- Store opening costs are expected to be approximately $13 million
- Diluted earnings per share of $0.51 to $0.55 are expected
- Lowe's second quarter ends on July 31, 2009 with operating results to be publicly released on Monday, August 17, 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 1 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 130 to 140 basis points
- Store opening costs are expected to be approximately $50 million
- Diluted earnings per share of $1.13 to $1.25 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 and increasing regulation 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 FORTUNEŽ 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, and full press release with financial tables- visit Lowes.com.
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