Lowe’s earnings down in first quarter
MOORESVILLE ó Lowe’s Companies, the world’s second-largest home improvement retailer, this morning reported net earnings of $607 million for the quarter ended May 2, a 17.9 percent decline from the same period a year ago.
Diluted earnings per share declined 14.6 percent to 41 cents from 48 cents in the first quarter of 2007.
Sales for the quarter declined 1.3 percent to $12 billion, down from $12.2 billion in the first quarter of 2007. Comparable store sales for the first quarter declined 8.4 percent.
“The challenging sales environment we have been experiencing for the past six quarters continued into the first quarter of 2008, and increasing financial pressures on consumers resulted in top-line sales that fell below our plan,” Robert A. Niblock, Lowe’s chairman and CEO, said in a press release. “The generally poor economic outlook, including well-known housing pressures, rising food and fuel prices and a more negative employment picture, eroded consumer confidence and impacted discretionary purchases for the home.
“With our offering of great products and exceptional service, Lowe’s continued to gain market share in the quarter, and diligent expense control helped us achieve respectable earnings in spite of the headwinds facing the industry. Fiscal 2008 will be a challenging year on many fronts, but we remain focused on what we can control and will continue managing for long-term success and pursuing opportunities as they arise in the current environment.”
During the quarter, Lowe’s opened 20 new stores. As of May 2, the chain operated 1,554 stores in the U.S. and Canada, representing 176.4 million square feet of retail selling space, an 11.1 percent increase from the previous year.
More information is available by going to the company’s Web site, www.Lowes.com/investor, and clicking on Lowe’s First Quarter 2008 Earnings Conference Call Webcast.
Lowe’s business outlook for the second quarter of 2008, compared to the second quarter 2007, include:
– The company expects to open approximately 23 new stores reflecting square footage growth of approximately 11 percent.
– Total sales are expected to increase about 1 percent.
– The company expects comparable store sales to decline 6 to 8 percent.
– Earnings before interest and taxes (EBIT) margin is expected to decline about 190 basis points driven by payroll, fixed costs, depreciation and gross margin.
– Store opening costs are expected to be approximately $22 million.
– Diluted earnings per share of 54 to 59 cents are expected.
Lowe’s second quarter ends on Aug. 1, with operating results to be released on Aug. 18.