November 21, 2023
(press release)
–
— Comparable Sales Decreased 7.4%; Diluted EPS of
— Updates Full Year 2023 Outlook —
Total sales for the quarter were
"In the third quarter, the company delivered strong operating performance and improved customer service despite a greater-than-expected pullback in DIY discretionary spending, particularly in bigger ticket categories. Given our 75% DIY mix, the DIY pressure disproportionately impacted our third quarter comp performance. At the same time, our investments in Pro continue to resonate, resulting in positive Pro comps again this quarter," said Marvin R. Ellison, Lowe's chairman, president and CEO. "As we look ahead, Lowe's is committed to offering value and convenience this holiday season, helping our customers save time and money. I'd like to extend my appreciation to our hardworking front-line associates who continue to elevate the customer experience." During the quarter, Lowe's opened one store and three Lowe's Outlet stores. As of Nov. 3, 2023, Lowe's operated 1,746 stores representing 194.9 million square feet of retail selling space. Capital Allocation The company continues to execute a disciplined capital allocation program to deliver long-term, sustainable shareholder value. During the quarter, the company repurchased approximately 7.3 million shares for
1 Adjusted diluted earnings per share is a non-GAAP financial measure. Refer to the "Non-GAAP Financial Measures Reconciliation" section of this release for additional information, as well as reconciliations between the Company's GAAP and non-GAAP financial results. 2 Total third quarter sales includes an approximately
3 Comparable sales are based on comparison to weeks 28-40 in 2022. Lowe's Business Outlook Based on lower-than-expected DIY sales, the company is updating its outlook for the operating results of full year 2023. Adjusted operating income, adjusted operating margin, adjusted effective income tax and adjusted diluted EPS are non-GAAP financial measures that exclude the impact and timing of 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 (which may be significant) 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 third quarter 2023 operating results is scheduled for today, Tuesday, Nov. 21, 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 Third 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. Consolidated Statements of Current Earnings and Accumulated Deficit (Unaudited) In Millions, Except Per Share and Percentage Data Three Months Ended Nine Months Ended November 3, 2023 October 28, 2022 November 3, 2023 October 28, 2022 Current Earnings Amount % Sales Amount % Sales Amount % Sales Amount % Sales Net sales $ 20,471 100.00 $ 23,479 100.00 $ 67,775 100.00 $ 74,614 100.00 Cost of sales 13,580 66.34 15,661 66.70 44,958 66.33 49,614 66.49 Gross margin 6,891 33.66 7,818 33.30 22,817 33.67 25,000 33.51 Expenses: Selling, general and administrative 3,761 18.37 6,443 27.45 11,673 17.23 15,200 20.38 Depreciation and amortization 434 2.12 451 1.92 1,275 1.88 1,345 1.80 Operating income 2,696 13.17 924 3.93 9,869 14.56 8,455 11.33 Interest – net 345 1.68 295 1.25 1,033 1.52 802 1.07 Pre-tax earnings 2,351 11.49 629 2.68 8,836 13.04 7,653 10.26 Income tax provision 578 2.83 475 2.02 2,130 3.14 2,174 2.92 Net earnings $ 1,773 8.66 $ 154 0.66 $ 6,706 9.90 $ 5,479 7.34 Weighted average common shares outstanding – 576 618 585 638 Basic earnings per common share (1) $ 3.07 $ 0.25 $ 11.43 $ 8.56 Weighted average common shares outstanding – 577 620 587 640 Diluted earnings per common share (1) $ 3.06 $ 0.25 $ 11.40 $ 8.53 Cash dividends per share $ 1.10 $ 1.05 $ 3.25 $ 2.90 Accumulated Deficit Balance at beginning of period $ (15,341) $ (8,895) $ (14,862) $ (5,115) Net earnings 1,773 154 6,706 5,479 Cash dividends declared (633) (643) (1,898) (1,833) Share repurchases (1,543) (3,929) (5,690) (11,844) Balance at end of period $ (15,744) $ (13,313) $ (15,744) $ (13,313) (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. Consolidated Statements of Comprehensive Income (Unaudited) In Millions, Except Percentage Data Three Months Ended Nine Months Ended November 3, 2023 October 28, 2022 November 3, 2023 October 28, 2022 Amount % Sales Amount % Sales Amount % Sales Amount % Sales Net earnings $ 1,773 8.66 $ 154 0.66 $ 6,706 9.90 $ 5,479 7.34 Foreign currency translation adjustments – net of tax — — (168) (0.72) 5 0.01 (173) (0.23) Cash flow hedges – net of tax (4) (0.01) 170 0.72 (10) (0.02) 352 0.47 Other — — 1 — — — (3) — Other comprehensive (loss)/income (4) (0.01) 3 — (5) (0.01) 176 0.24 Comprehensive income $ 1,769 8.65 $ 157 0.66 $ 6,701 9.89 $ 5,655 7.58 Lowe's Companies, Inc. Consolidated Balance Sheets (Unaudited) In Millions, Except Par Value Data November 3, 2023 October 28, 2022 Assets Current assets: Cash and cash equivalents $ 1,210 $ 3,192 Short-term investments 321 464 Merchandise inventory – net 17,530 19,817 Other current assets 907 1,518 Total current assets 19,968 24,991 Property, less accumulated depreciation 17,527 17,275 Operating lease right-of-use assets 3,647 3,512 Long-term investments 238 63 Deferred income taxes – net 280 301 Other assets 859 831 Total assets $ 42,519 $ 46,973 Liabilities and shareholders' deficit Current liabilities: Current maturities of long-term debt $ 544 $ 609 Current operating lease liabilities 533 651 Accounts payable 9,914 12,249 Accrued compensation and employee benefits 750 1,405 Deferred revenue 1,499 1,736 Income taxes payable 121 913 Other current liabilities 3,135 3,313 Total current liabilities 16,496 20,876 Long-term debt, excluding current maturities 35,374 32,904 Noncurrent operating lease liabilities 3,602 4,048 Deferred revenue – Lowe's protection plans 1,228 1,184 Other liabilities 966 829 Total liabilities 57,666 59,841 Shareholders' deficit: Preferred stock,
— — Common stock,
288 305 Capital in excess of par value 7 — Accumulated deficit (15,744) (13,313) Accumulated other comprehensive income 302 140 Total shareholders' deficit (15,147) (12,868) Total liabilities and shareholders' deficit $ 42,519 $ 46,973 Lowe's Companies, Inc. Consolidated Statements of Cash Flows (Unaudited) In Millions Nine Months Ended November 3, 2023 October 28, 2022 Cash flows from operating activities: Net earnings $ 6,706 $ 5,479 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 1,427 1,509 Noncash lease expense 370 403 Deferred income taxes (27) (252) Asset impairment and loss on property – net 50 2,113 Gain on sale of business (79) — Share-based payment expense 160 165 Changes in operating assets and liabilities: Merchandise inventory – net 1,002 (2,308) Other operating assets 236 20 Accounts payable (610) 921 Deferred revenue (77) (117) Other operating liabilities (2,126) 205 Net cash provided by operating activities 7,032 8,138 Cash flows from investing activities: Purchases of investments (1,283) (659) Proceeds from sale/maturity of investments 1,215 597 Capital expenditures (1,344) (1,090) Proceeds from sale of property and other long-term assets 29 37 Proceeds from sale of business 100 — Other – net (23) — Net cash used in investing activities (1,306) (1,115) Cash flows from financing activities: Net change in commercial paper (499) — Net proceeds from issuance of debt 2,983 9,667 Repayment of debt (576) (831) Proceeds from issuance of common stock under share-based payment plans 79 86 Cash dividend payments (1,899) (1,727) Repurchases of common stock (5,937) (12,127) Other – net (15) — Net cash used in financing activities (5,864) (4,932) Effect of exchange rate changes on cash — (32) Net (decrease)/increase in cash and cash equivalents (138) 2,059 Cash and cash equivalents, beginning of period 1,348 1,133 Cash and cash equivalents, end of period $ 1,210 $ 3,192 Lowe's Companies, Inc. 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 October 28, 2022. This measure excludes the impact of a certain item, further described below, not contemplated in Lowe's Business Outlook to assist analysts and investors in understanding the comparison of operational performance for the third quarter of fiscal 2022. Fiscal 2022 Impacts During fiscal 2022, the Company recognized financial impacts from the following, not contemplated in the Company's Business Outlook for fiscal 2022: 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 October 28, 2022 Pre-Tax Tax1 Net Diluted earnings per share, as reported $ 0.25 Non-GAAP adjustments – per share impacts Canadian retail business transaction 3.32 (0.30) 3.02 Adjusted diluted earnings per share $ 3.27 1 Represents the corresponding tax benefit or expense specifically related to the item excluded from adjusted diluted earnings per share. View original content to download multimedia:https://www.prnewswire.com/news-releases/lowes-reports-third-quarter-2023-sales-and-earnings-results-301994117.html SOURCE Lowe's Companies, Inc.
basic
diluted
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575 million and 611 million, respectively
Non-GAAP Financial Measure Reconciliation (Unaudited)
Earnings
Earnings
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