Lowe's Q1 net earnings up to US$2.33B from US$2.32B; net sales down to US$23.66B from US$24.42B as comp sales fall 4%, comp sales for US home improvement business fall 3.8%, though Pro customer sales rise 20%

Sample article from our Retail & Omnichannel

MOORESVILLE, North Carolina , May 18, 2022 (press release) –

— Consolidated Comparable Sales Decreased 4.0%; U.S. Comparable Sales Decreased 3.8% —
— Represents U.S. Comparable Sales Increase on a Two-Year Basis of 19.7% —
— First Quarter Diluted EPS of $3.51 —
— Affirms Fiscal 2022 Outlook —

Lowe's Companies, Inc. (NYSE: LOW) today reported net earnings of $2.3 billion, in line with prior-year results, and diluted earnings per share (EPS) of $3.51 for the quarter ended April 29, 2022, compared to diluted EPS of $3.21 in the first quarter of 2021. 

Total sales for the first quarter were $23.7 billion compared to $24.4 billion in the first quarter of 2021, and comparable sales decreased 4.0%.  Comparable sales for the U.S. home improvement business decreased 3.8% for the first quarter.  Pro customer sales increased 20%.

"Our sales this quarter were in line with our expectations, excluding our outdoor seasonal categories that were impacted by unseasonably cold temperatures in April.  Because 75% of our customer base is DIY, our Q1 sales were disproportionately impacted by the cooler spring temperatures.  Now that spring has finally arrived, we are pleased with the improved sales trends we are seeing in May,"  commented Marvin R. Ellison, Lowe's chairman, president and CEO.  "This quarter we delivered over 65 basis points of operating margin improvement, driven by our Total Home strategy and the execution of our Perpetual Productivity Improvement or PPI initiatives.  Despite some increased uncertainty in the macro environment, we remain confident in the outlook for the home improvement market and our ability to deliver operating margin expansion in 2022.  I would like to thank our front-line associates for their ongoing commitment to our customers and our communities."

Capital Allocation

The company continues to execute a disciplined capital allocation strategy to deliver long-term, sustainable shareholder value. During the quarter, the company repurchased approximately 19 million shares for $4.1 billion, and it paid $537 million in dividends.

Lowe's Business Outlook

The company is affirming its outlook for the operating results of Full Year 2022.

Full Year 2022 Outlook -- a 53-week Year (comparisons to full year 2021 -- a 52-week year)

  • Total sales of $97 billion to $99 billion, including the 53rd week

  • 53rd week expected to increase total sales by approximately $1.0 billion to $1.5 billion

  • Comparable sales expected to range from a decline of 1% to an increase of 1%

  • Gross margin rate up slightly compared to prior year

  • Depreciation and amortization of approximately $1.75 billion

  • Operating income as a percentage of sales (operating margin) of 12.8% to 13.0%

  • Interest expense of $1.0 to $1.1 billion

  • Effective income tax rate of approximately 25%

  • Diluted earnings per share of $13.10 to $13.60

  • Total share repurchases of approximately $12 billion

  • ROIC1 of over 36%

  • Capital expenditures of approximately $2 billion

A conference call to discuss first quarter 2022 operating results is scheduled for today, Wednesday, May 18, at 9:00 am 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 2022 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.

As of April 29, 2022, Lowe's operated 1,971 home improvement and hardware stores in the United States and Canada representing 208 million square feet of retail selling space, and it serviced approximately 230 dealer-owned stores.

Lowe's Companies, Inc.

Lowe's Companies, Inc. (NYSE: LOW) is a FORTUNE® 50 home improvement company serving approximately 19 million customer transactions a week in the United States and Canada. With fiscal year 2021 sales of over $96 billion, Lowe's and its related businesses operate or service nearly 2,200 home improvement and hardware stores and employ over 300,000 associates. Based in Mooresville, N.C., Lowe's supports the communities it serves through programs focused on creating safe, affordable housing and helping to develop the next generation of skilled trade experts. For more information, visit Lowes.com.

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, 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 U.S. and world financial markets and the consequent reduced availability and/or higher cost of borrowing to Lowe's and its customers, slower rates of growth in real disposable personal income that could affect the rate of growth in consumer spending, inflation and its impacts on discretionary spending and on our costs, shortages, and other disruptions in the labor supply, interest rate and currency fluctuations, home price appreciation or decreasing housing turnover, the availability of consumer credit and of mortgage financing, trade policy changes or additional tariffs, outbreaks of pandemics, fluctuations in fuel and energy costs, inflation or deflation of commodity prices, natural disasters, armed conflicts, acts of both domestic and international terrorism, and other factors that can negatively affect our customers.

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

 

704-758-4345

 

kate.pearlman@lowes.com

 

steve.j.salazar@lowes.com

 

1 Return on Invested Capital (ROIC) is calculated using a non-GAAP financial measure. 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 and the information is not available without unreasonable effort.

 

Lowe's Companies, Inc.

Consolidated Statements of Current Earnings and (Accumulated Deficit)/Retained Earnings (Unaudited)

In Millions, Except Per Share and Percentage Data

 

 

Three Months Ended

 

April 29, 2022

 

April 30, 2021

Current Earnings

Amount

 

% Sales

 

Amount

 

% Sales

Net sales

$       23,659

 

100.00

 

$       24,422

 

100.00

Cost of sales

15,609

 

65.97

 

16,292

 

66.71

Gross margin

8,050

 

34.03

 

8,130

 

33.29

Expenses:

 

 

 

 

 

 

 

Selling, general and administrative

4,303

 

18.19

 

4,494

 

18.40

Depreciation and amortization

445

 

1.88

 

391

 

1.60

Operating income

3,302

 

13.96

 

3,245

 

13.29

Interest – net

243

 

1.03

 

211

 

0.87

Pre-tax earnings

3,059

 

12.93

 

3,034

 

12.42

Income tax provision

726

 

3.07

 

713

 

2.92

Net earnings

$         2,333

 

9.86

 

$         2,321

 

9.50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding – basic

660

 

 

 

718

 

 

Basic earnings per common share (1)

$           3.52

 

 

 

$           3.22

 

 

Weighted average common shares outstanding – diluted

662

 

 

 

720

 

 

Diluted earnings per common share (1)

$           3.51

 

 

 

$           3.21

 

 

Cash dividends per share

$           0.80

 

 

 

$           0.60

 

 

 

 

 

 

 

 

 

 

(Accumulated Deficit)/Retained Earnings

 

 

 

 

 

 

 

Balance at beginning of period

$       (5,115)

 

 

 

$         1,117

 

 

Net earnings

2,333

 

 

 

2,321

 

 

Cash dividends declared

(524)

 

 

 

(430)

 

 

Share repurchases

(4,061)

 

 

 

(2,910)

 

 

Balance at end of period

$       (7,367)

 

 

 

$              98

 

 

 

 

 

 

 

 

 

 

(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 $2,325 million for the three months ended April 29, 2022, and $2,312 million for the three months ended April 30, 2021.

 

Lowe's Companies, Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

In Millions, Except Percentage Data

 

 

Three Months Ended

 

April 29, 2022

 

April 30, 2021

 

Amount

 

% Sales

 

Amount

 

% Sales

Net earnings

$         2,333

 

9.86

 

$         2,321

 

9.50

Foreign currency translation adjustments – net of tax

(17)

 

(0.07)

 

102

 

0.41

Cash flow hedges – net of tax

219

 

0.93

 

24

 

0.10

Other 

(2)

 

(0.01)

 

(1)

 

Other comprehensive income

200

 

0.85

 

125

 

0.51

Comprehensive income

$         2,533

 

10.71

 

$         2,446

 

10.01

 

 

 

 

 

 

 

 

 

Lowe's Companies, Inc.

Consolidated Balance Sheets (Unaudited)

In Millions, Except Par Value Data

 

 

 

 

 

 

 

 

 

 

April 29, 2022

 

April 30, 2021

 

January 28, 2022

Assets

 

 

 

 

 

 

     Current assets:

 

 

 

 

 

 

     Cash and cash equivalents

 

$                    3,414

 

$                    6,692

 

$                    1,133

     Short-term investments

 

368

 

454

 

271

     Merchandise inventory – net

 

20,239

 

18,382

 

17,605

     Other current assets

 

1,590

 

1,288

 

1,051

     Total current assets

 

25,611

 

26,816

 

20,060

     Property, less accumulated depreciation

 

18,890

 

19,059

 

19,071

     Operating lease right-of-use assets

 

4,131

 

3,886

 

4,108

     Long-term investments

 

76

 

197

 

199

     Deferred income taxes – net

 

33

 

213

 

164

     Other assets

 

984

 

1,029

 

1,038

     Total assets

 

$                  49,725

 

$                  51,200

 

$                  44,640

 

 

 

 

 

 

 

Liabilities and shareholders' (deficit)/equity

 

 

 

 

 

 

     Current liabilities:

 

 

 

 

 

 

     Current maturities of long-term debt

 

$                       121

 

$                    1,338

 

$                       868

     Current operating lease liabilities

 

639

 

551

 

636

     Accounts payable

 

13,831

 

13,964

 

11,354

     Accrued compensation and employee benefits

 

1,190

 

1,312

 

1,561

     Deferred revenue

 

2,094

 

2,022

 

1,914

     Other current liabilities

 

3,956

 

3,705

 

3,335

     Total current liabilities

 

21,831

 

22,892

 

19,668

     Long-term debt, excluding current maturities

 

28,776

 

21,906

 

23,859

     Noncurrent operating lease liabilities

 

4,061

 

3,925

 

4,021

     Deferred revenue – Lowe's protection plans

 

1,137

 

1,050

 

1,127

     Other liabilities

 

797

 

982

 

781

     Total liabilities

 

56,602

 

50,755

 

49,456

 

 

 

 

 

 

 

Shareholders' (deficit)/equity:

 

 

 

 

 

 

Preferred stock, $5 par value: Authorized – 5.0 million shares; Issued and
     outstanding – none

 

 

 

Common stock, $0.50 par value: Authorized – 5.6 billion shares; Issued
     and outstanding – 652 million, 715 million, and 670 million shares,      
     respectively

 

326

 

358

 

335

Capital in excess of par value

 

 

 

(Accumulated deficit)/retained earnings

 

(7,367)

 

98

 

(5,115)

Accumulated other comprehensive income/(loss)

 

164

 

(11)

 

(36)

Total shareholders' (deficit)/equity

 

(6,877)

 

445

 

(4,816)

Total liabilities and shareholders' (deficit)/equity

 

$                  49,725

 

$                  51,200

 

$                  44,640

 

 

 

 

 

 

 

 

 

 

Lowe's Companies, Inc.

Consolidated Statements of Cash Flows (Unaudited)

In Millions

 

 

Three Months Ended

 

April 29, 2022

 

April 30, 2021

Cash flows from operating activities:

 

 

 

     Net earnings

$                        2,333

 

$                        2,321

     Adjustments to reconcile net earnings to net cash provided by operating activities:

 

 

 

        Depreciation and amortization

503

 

443

        Noncash lease expense

135

 

124

        Deferred income taxes

59

 

110

        Loss/(gain) on property and other assets – net

4

 

(15)

        Share-based payment expense

50

 

54

        Changes in operating assets and liabilities:

 

 

 

          Merchandise inventory – net

(2,646)

 

(2,123)

          Other operating assets

(212)

 

(343)

          Accounts payable

2,479

 

3,058

          Deferred revenue

191

 

442

          Other operating liabilities

81

 

421

     Net cash provided by operating activities

2,977

 

4,492

 

 

 

 

Cash flows from investing activities:

 

 

 

     Purchases of investments

(109)

 

(293)

     Proceeds from sale/maturity of investments

132

 

347

     Capital expenditures

(343)

 

(461)

     Proceeds from sale of property and other long-term assets

10

 

64

     Other – net

 

(134)

     Net cash used in investing activities

(310)

 

(477)

 

 

 

 

Cash flows from financing activities:

 

 

 

     Net proceeds from issuance of debt

4,964

 

1,988

     Repayment of debt

(773)

 

(543)

     Proceeds from issuance of common stock under share-based payment plans

1

 

9

     Cash dividend payments

(537)

 

(440)

     Repurchases of common stock

(4,037)

 

(3,038)

     Other – net

(4)

 

4

     Net cash used in financing activities

(386)

 

(2,020)

 

 

 

 

Effect of exchange rate changes on cash

 

7

 

 

 

 

Net increase in cash and cash equivalents

2,281

 

2,002

Cash and cash equivalents, beginning of period

1,133

 

4,690

Cash and cash equivalents, end of period

$                        3,414

 

$                        6,692

 

 

 

 

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.

See our dashboard in action - schedule an demo
Chelsey Quick
Chelsey Quick
- VP Client Success -

We offer built-to-order retail & omnichannel coverage for our clients. Contact us for a free consultation.

About Us

We deliver market news & information relevant to your business.

We monitor all your market drivers.

We aggregate, curate, filter and map your specific needs.

We deliver the right information to the right person at the right time.

Our Contacts

1990 S Bundy Dr. Suite #380,
Los Angeles, CA 90025

+1 (310) 553 0008

About Cookies On This Site

We collect data, including through use of cookies and similar technology ("cookies") that enchance the online experience. By clicking "I agree", you agree to our cookies, agree to bound by our Terms of Use, and acknowledge our Privacy Policy. For more information on our data practices and how to exercise your privacy rights, please see our Privacy Policy.