01—Abstract
Summary
Summary of the 10-K filed April 2, 2018. Cited figures are marked; the original filing is the authoritative source.
This 10-K filing for Lowe's Companies, Inc. for the fiscal year ended February 2, 2018, highlights a year of solid sales growth driven by comparable store sales increases and strategic acquisitions, including RONA and Maintenance Supply Headquarters.
The company demonstrated improved profitability with a notable increase in net earnings and diluted earnings per share. Lowe's continued its focus on enhancing its omni-channel capabilities, investing in technology and infrastructure to better serve its diverse customer base, including DIYers and Pro customers. Key financial maneuvers included significant share repurchases and dividend payments, demonstrating a commitment to returning capital to shareholders.
The company also navigated changes in tax legislation, adjusting its financial outlook and strategies accordingly. Management expressed confidence in future liquidity and highlighted strategic priorities for growth, including leveraging analytics, expanding fulfillment options, and enhancing the Pro and DIFM customer experiences, positioning Lowe's as an omni-channel project authority.
02—Key points
Key Highlights
- Total net sales increased by 5.5% to $68.6 billion, driven by a 4.0% increase in comparable sales and strategic acquisitions.
- Net earnings rose by 11.5% to $3.4 billion, with diluted earnings per share increasing by 17.9% to $4.09.
- The company repurchased $3.1 billion of its stock and paid $1.3 billion in dividends, underscoring a strong commitment to shareholder returns.
- Investments were made to enhance omni-channel capabilities, including improvements to Lowes.com and Pro customer offerings.
- Acquisitions of RONA and Maintenance Supply Headquarters were integrated, expanding the company's reach and capabilities.
- The company is focusing on six strategic areas for 2018 to strengthen competitiveness and enhance its omni-channel project authority.
- Lowe's achieved an effective income tax rate of 37.2% in 2017, benefiting from the Tax Cuts and Jobs Act of 2017.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2018, Lowes Companies Inc kept $0.05.
- Revenue$68.62B100.0%
- Cost of revenue−$46.19B67.3%
- Gross profit$22.43B32.7%
- Operating costs−$15.85B23.1%
- Operating income$6.59B9.6%
- Interest, other & tax−$3.14B4.6%
- Net income$3.45B5.0%
Where FY2018 revenue went
$68.62B- Cost of revenue: $46.19B, 67% of revenue
- SG&A: $14.44B, 21% of revenue
- Net income: $3.45B, 5.0% of revenue
- Other operating costs: $1.40B, 2.0% of revenue
- Interest, other & tax: $3.14B, 4.6% of revenue
Kept 5.0% as net incomeNet income $3.45B · 5.0%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2018filed April 2, 2018Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $68.62B$65.02B | +5.5% |
| Cost of Revenue | $46.19B$43.34B | +6.6% |
| Gross Profit | $22.43B$21.67B | +3.5% |
| SG&A Expenses | $14.44B$14.38B | +0.5% |
| Operating Income | $6.59B$5.85B | +12.7% |
| Net Income | $3.45B$3.09B | +11.5% |
| EPS (Basic) | $4.09$3.48 | +17.5% |
| EPS (Diluted) | $4.09$3.47 | +17.9% |
| Shares Outstanding (Basic) | 839.00M880.00M | −4.7% |
| Shares Outstanding (Diluted) | 840.00M881.00M | −4.7% |
05—Questions
Frequently Asked Questions
What was Lowe's primary financial performance in fiscal year 2017?
In fiscal year 2017, Lowe's reported a 5.5% increase in net sales, reaching $68.6 billion, primarily driven by a 4.0% rise in comparable sales and contributions from acquisitions. Net earnings increased by 11.5% to $3.4 billion, leading to a diluted earnings per share of $4.09.
How is Lowe's addressing the evolving retail landscape and customer expectations?
Lowe's is focusing on enhancing its omni-channel capabilities to provide seamless customer experiences across all channels. This includes investing in digital platforms like Lowes.com, offering flexible fulfillment options, and improving engagement with both DIY and Pro customers through dedicated tools and services.
What is Lowe's strategy for returning capital to shareholders?
Lowe's demonstrated a strong commitment to shareholder returns by repurchasing $3.1 billion of its stock and paying $1.3 billion in dividends during fiscal year 2017. The company has substantial remaining capacity under its share repurchase program.
What impact did the Tax Cuts and Jobs Act of 2017 have on Lowe's?
The Tax Cuts and Jobs Act of 2017 lowered the U.S. federal corporate income tax rate from 35% to 21%. This resulted in a blended tax rate for Lowe's in 2017 and provided a tax benefit. The company also provided a one-time cash bonus to eligible employees, which was recorded as an expense.
06—Continue