10-KPeriod: FY2014

LOWES COMPANIES INC Annual Report, Year Ended Jan 31, 2014

Filed March 31, 2014For Securities:LOW

Summary

Lowe's Companies, Inc. reported strong performance for the fiscal year ended January 31, 2014, with net sales increasing by 5.7% to $53.4 billion and net earnings up 16.7% to $2.3 billion. This growth was driven by a 4.8% increase in comparable sales, reflecting both higher average ticket prices and an increase in customer transactions. The company attributes this success to strategic initiatives focused on enhancing retail relevance, including Value Improvement and Product Differentiation, along with an investment in store labor to improve customer service during peak hours. Looking ahead to fiscal year 2014, Lowe's anticipates continued sales growth, supported by improving economic indicators such as projected increases in real disposable personal income and a declining unemployment rate. The company plans to focus on optimizing its business model, with key priorities including improved seasonal planning, enhancing its product and service offering for the Pro customer segment, and further developing customer experience design capabilities. Lowe's is also committed to returning capital to shareholders through significant share repurchase programs and dividends.

Financial Highlights

51 data points
Beta

Revenue

$53.42B

34.6% Gross Margin

Net Income

$2.29B

4.3% Net Margin

EPS (Diluted)

$2.14

Total Assets

$32.73B

Cash & Equivalents

$391.00M

Free Cash Flow

$3.17B

Financial Statements
Beta
Revenue$53.42B
Cost of Revenue$34.94B
Gross Profit$18.48B
SG&A Expenses$12.87B
Operating Expenses$14.80B
Net Income$2.29B
EPS (Basic)$2.14
EPS (Diluted)$2.14
Shares Outstanding (Basic)1.06B
Shares Outstanding (Diluted)1.06B

Key Highlights

  • 1Net sales grew 5.7% to $53.4 billion in fiscal year 2013, demonstrating robust top-line performance.
  • 2Net earnings increased by 16.7% to $2.3 billion, indicating improved profitability.
  • 3Comparable sales increased by 4.8%, driven by a 3.2% rise in average ticket and a 1.6% increase in transactions.
  • 4The company successfully completed its Value Improvement and Product Differentiation initiatives, enhancing product relevance and store presentation.
  • 5Lowe's demonstrated strong operating cash flow of $4.1 billion, supporting capital expenditures and shareholder returns.
  • 6A significant capital return program is underway, with $3.7 billion spent on share repurchases and $733 million paid in dividends during fiscal year 2013.
  • 7The company is actively expanding its presence, with plans to open approximately 15 home improvement stores and 5 Orchard stores in fiscal year 2014.

Frequently Asked Questions

Lowe's sales growth in fiscal year 2013 was driven by a 4.8% increase in comparable sales, which was composed of a 3.2% increase in comparable average ticket and a 1.6% increase in comparable customer transactions. This performance was supported by strategic initiatives such as Value Improvement and Product Differentiation, as well as favorable economic conditions including increased housing turnover and job growth.

Lowe's is investing in its future through several key priorities for fiscal year 2014. These include refining its Sales & Operations Planning process for better seasonal planning, enhancing its product and service offerings for the growing Pro customer segment, and continuing to build its customer experience design capabilities. The company is also planning to open new stores and upgrade its IT infrastructure to support an omni-channel experience.

Lowe's is committed to returning capital to shareholders through both dividends and share repurchases. In fiscal year 2013, the company repurchased approximately 86.7 million shares for $3.7 billion and paid $733 million in dividends. The company has substantial share repurchase authorizations in place for future periods.

Lowe's anticipates a moderately accelerating growth in the home improvement industry for fiscal year 2014. This positive outlook is based on improving economic forecasts, including stronger job and income growth, a continued housing recovery, and strengthening household finances. The company expects total sales to increase by approximately 5% and comparable sales to increase by approximately 4% in fiscal year 2014.