MOORESVILLE, North Carolina
,
May 23, 2023
(press release)
–
— Diluted EPS of
Lowe's Companies, Inc. (NYSE: LOW) today reported net earnings of
During the first quarter, the company recognized a gain associated with the 2022 sale of the Canadian retail business. This positively impacted first quarter diluted EPS by
Total sales for the quarter were
"We are pleased with the performance of our business despite record lumber deflation and unfavorable spring weather. Although we delivered positive comparable sales in Pro and online for the first quarter, we are updating our full-year outlook to reflect softer-than-expected consumer demand for discretionary purchases," said Marvin R. Ellison, Lowe's chairman, president and CEO. "We remain optimistic about the medium-to-long term outlook for home improvement and our ability to continue to grow market share through our Total Home strategy. I would like to thank all of our front-line associates for their continued hard work and dedication." Capital Allocation 1 Adjusted diluted earnings per share is a non-GAAP financial measure. Refer to the "Non-GAAP Financial Measure Reconciliation" section of this release for additional information as well as a reconciliation between the company's GAAP and non-GAAP financial results. 2 Total first quarter sales includes approximately
Lowe's Business Outlook Based on higher-than-expected lumber deflation and lower-than-expected DIY discretionary sales, the company is updating its outlook for the operating results of full year 2023. Adjusted operating income, adjusted operating margin, adjusted diluted EPS and adjusted effective income tax rate are non-GAAP financial measures that exclude the gain associated with the 2022 sale of the Canadian retail business, recorded in the first quarter. 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 without unreasonable effort, including timing of adjustments associated with the sale of our Canadian retail business. Full Year 2023 Outlook – a 52-week Year (comparisons to full year 2022 – a 53-week year) A conference call to discuss first quarter 2023 operating results is scheduled for today, Tuesday, May 23, 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 First Quarter 2023 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 17 million customer transactions a week in the
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 (including objectives related to environmental, social, and governance matters), 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
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 Lowe's Companies, Inc. Three Months Ended May 5, 2023 April 29, 2022 Current Earnings Amount % Sales Amount % Sales Net sales $ 22,347 100.00 $ 23,659 100.00 Cost of sales 14,820 66.32 15,609 65.97 Gross margin 7,527 33.68 8,050 34.03 Expenses: Selling, general and administrative 3,824 17.12 4,303 18.19 Depreciation and amortization 415 1.85 445 1.88 Operating income 3,288 14.71 3,302 13.96 Interest – net 349 1.56 243 1.03 Pre-tax earnings 2,939 13.15 3,059 12.93 Income tax provision 679 3.04 726 3.07 Net earnings $ 2,260 10.11 $ 2,333 9.86 Weighted average common shares outstanding – basic 596 660 Basic earnings per common share (1) $ 3.78 $ 3.52 Weighted average common shares outstanding – diluted 597 662 Diluted earnings per common share (1) $ 3.77 $ 3.51 Cash dividends per share $ 1.05 $ 0.80 Accumulated Deficit Balance at beginning of period $ (14,862) $ (5,115) Net earnings 2,260 2,333 Cash dividends declared (624) (524) Share repurchases (2,084) (4,061) Balance at end of period $ (15,310) $ (7,367) 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
Lowe's Companies, Inc. Three Months Ended May 5, 2023 April 29, 2022 Amount % Sales Amount % Sales Net earnings $ 2,260 10.11 $ 2,333 9.86 Foreign currency translation adjustments – net of tax — — (17) (0.07) Cash flow hedges – net of tax (4) (0.02) 219 0.93 Other 1 0.01 (2) (0.01) Other comprehensive (loss)/income (3) (0.01) 200 0.85 Comprehensive income $ 2,257 10.10 $ 2,533 10.71 Lowe's Companies, Inc. May 5, 2023 April 29, 2022 Assets Current assets: Cash and cash equivalents $ 2,950 $ 3,414 Short-term investments 423 368 Merchandise inventory – net 19,522 20,239 Other current assets 1,023 1,590 Total current assets 23,918 25,611 Property, less accumulated depreciation 17,402 18,890 Operating lease right-of-use assets 3,504 4,131 Long-term investments 103 76 Deferred income taxes – net 150 33 Other assets 840 984 Total assets $ 45,917 $ 49,725 Liabilities and shareholders' deficit Current liabilities: Short-term borrowings $ 72 $ — Current maturities of long-term debt 589 121 Current operating lease liabilities 525 639 Accounts payable 11,885 13,831 Accrued compensation and employee benefits 766 1,190 Deferred revenue 1,645 2,094 Income taxes payable 526 741 Other current liabilities 3,202 3,215 Total current liabilities 19,210 21,831 Long-term debt, excluding current maturities 35,863 28,776 Noncurrent operating lease liabilities 3,479 4,061 Deferred revenue – Lowe's protection plans 1,206 1,137 Other liabilities 869 797 Total liabilities 60,627 56,602 Shareholders' deficit: Preferred stock,
— — Common stock,
296 326 Accumulated deficit (15,310) (7,367) Accumulated other comprehensive income 304 164 Total shareholders' deficit (14,710) (6,877) Total liabilities and shareholders' deficit $ 45,917 $ 49,725 Lowe's Companies, Inc. Three Months Ended May 5, 2023 April 29, 2022 Cash flows from operating activities: Net earnings $ 2,260 $ 2,333 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 465 503 Noncash lease expense 108 135 Deferred income taxes 102 59 Asset impairment and loss on property – net 11 4 Gain on sale of business (67) — Share-based payment expense 59 50 Changes in operating assets and liabilities: Merchandise inventory – net (990) (2,646) Other operating assets 157 (212) Accounts payable 1,361 2,479 Deferred revenue 48 191 Other operating liabilities (1,408) 81 Net cash provided by operating activities 2,106 2,977 Cash flows from investing activities: Purchases of investments (450) (109) Proceeds from sale/maturity of investments 412 132 Capital expenditures (380) (343) Proceeds from sale of property and other long-term assets 8 10 Proceeds from sale of business 123 — Other – net (17) — Net cash used in investing activities (304) (310) Cash flows from financing activities: Net change in commercial paper (427) — Net proceeds from issuance of debt 2,983 4,964 Repayment of debt (22) (773) Proceeds from issuance of common stock under share-based payment plans 5 1 Cash dividend payments (633) (537) Repurchases of common stock (2,106) (4,037) Other – net — (4) Net cash used in financing activities (200) (386) Net increase in cash and cash equivalents 1,602 2,281 Cash and cash equivalents, beginning of period 1,348 1,133 Cash and cash equivalents, end of period $ 2,950 $ 3,414 Lowe's Companies, Inc. Fiscal 2023 Impacts Adjusted diluted earnings per share should not be considered an alternative to, or more meaningful indicator of, the Company's diluted earnings per share as prepared in accordance with GAAP. The Company's methods of determining non-GAAP financial measures may differ from the method used by other companies and may not be comparable. A reconciliation between the Company's GAAP and non-GAAP financial results is shown below and available on the Company's website at ir.lowes.com. Three Months Ended May 5, 2023 Pre-Tax Earnings Tax1 Net Earnings Diluted earnings per share, as reported $ 3.77 Non-GAAP adjustments – per share impacts Canadian retail business transaction (0.10) — (0.10) Adjusted diluted earnings per share $ 3.67 1 Represents the corresponding tax benefit or expense specifically related to the item excluded from adjusted diluted earnings per share. SOURCE Lowe's Companies, Inc.
— Comparable Sales Decreased 4.3% —
— Updates Full Year 2023 Outlook —
The company continues to execute a disciplined capital allocation program to deliver long-term, sustainable shareholder value. During the quarter, the company repurchased approximately 10.6 million shares for
Consolidated Statements of Current Earnings and Accumulated Deficit (Unaudited)
In Millions, Except Per Share and Percentage Data
Consolidated Statements of Comprehensive Income (Unaudited)
In Millions, Except Percentage Data
Consolidated Balance Sheets (Unaudited)
In Millions, Except Par Value Data
none
592 million and 652 million, respectively
Consolidated Statements of Cash Flows (Unaudited)
In Millions
Non-GAAP Financial Measure Reconciliation (Unaudited)
To provide additional transparency, the Company has presented a comparison to the non-GAAP financial measure of adjusted diluted earnings per share for the three months ended May 5, 2023. This measure excludes the impact of certain items, further described below, not contemplated in Lowe's Business Outlook to assist analysts and investors in understanding operational performance for the first quarter of fiscal 2023.
During fiscal 2023, the Company recognized financial impacts from the following, not contemplated in the Company's Business Outlook for fiscal 2023:
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