01—Abstract
Summary
Summary of the 10-K filed March 25, 2024. Cited figures are marked; the original filing is the authoritative source.
Lowe's Companies, Inc. reported a decrease in net sales for fiscal year 2023 to $86.4 billiona, a 11.0% drop from the previous year, attributed to the sale of its Canadian retail business and a 4.7% decrease in comparable sales.
Despite the sales decline, net earnings increased by 20.0% to $7.7 billion, and diluted earnings per share rose to $13.20b, largely due to cost management initiatives and favorable adjustments related to the Canadian business sale in the prior year. The company continues to navigate macroeconomic pressures affecting DIY customer demand, particularly for larger ticket items, while showing positive comparable sales growth in the Pro customer segment, driven by strategic investments in Pro offerings and loyalty programs. Lowe's remains focused on its "Total Home" strategy, emphasizing an omnichannel experience, Pro customer penetration, installation services, localization, and assortment elevation.
The company generated strong operating cash flows of $8.1 billionc and returned $8.8 billion to shareholders through $6.3 billion in share repurchases and $2.5 billion in dividends. Management is committed to efficient capital allocation and productivity improvements (PPI) to drive long-term shareholder value amidst near-term market uncertainty. The company also highlighted its ongoing commitment to human capital, community investment, and sustainability goals, including a net-zero emissions target by 2050.
02—Key points
Key Highlights
- Net sales decreased by 11.0% to $86.4 billion in fiscal 2023, impacted by the sale of the Canadian retail business and a 4.7% decline in comparable sales, primarily due to reduced DIY customer demand for larger purchases.
- Net earnings increased by 20.0% to $7.7 billion, with diluted earnings per share rising to $13.20, partly due to favorable year-over-year adjustments related to the sale of the Canadian retail business.
- The company generated $8.1 billion in cash flow from operations and returned $8.8 billion to shareholders through $6.3 billion in share repurchases and $2.5 billion in dividends.
- Pro customer comparable sales remained positive, supported by investments in Pro offerings and loyalty programs, contrasting with declines in DIY segments.
- Lowe's continues to execute its "Total Home" strategy, focusing on omnichannel capabilities, Pro penetration, installation services, localization, and assortment enhancements.
- Significant investments in supply chain transformation and technology are ongoing to support omnichannel growth and operational efficiency.
- The company maintained a strong liquidity position with $921 million in cash and cash equivalents and $4.0 billion in undrawn credit facilities as of February 2, 2024.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Lowes Companies Inc kept $0.09.
- Revenue$86.38B100.0%
- Cost of revenue−$57.53B66.6%
- Gross profit$28.84B33.4%
- Operating costs−$17.29B20.0%
- Operating income$11.56B13.4%
- Interest, other & tax−$3.83B4.4%
- Net income$7.73B8.9%
Where FY2024 revenue went
$86.38B- Cost of revenue: $57.53B, 67% of revenue
- SG&A: $15.57B, 18% of revenue
- Net income: $7.73B, 8.9% of revenue
- Other operating costs: $1.72B, 2.0% of revenue
- Interest, other & tax: $3.83B, 4.4% of revenue
Kept 8.9% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed March 25, 2024Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $86.38B$97.06B | −11.0% |
| Cost of Revenue | $57.53B$64.80B | −11.2% |
| Gross Profit | $28.84B$32.26B | −10.6% |
| SG&A Expenses | $15.57B$20.33B | −23.4% |
| Operating Income | $11.56B$10.16B | +13.8% |
| Net Income | $7.73B$6.44B | +20.0% |
| EPS (Basic) | $13.23$10.20 | +29.7% |
| EPS (Diluted) | $13.20$10.17 | +29.8% |
| Shares Outstanding (Basic) | 582.00M629.00M | −7.5% |
| Shares Outstanding (Diluted) | 584.00M631.00M | −7.4% |
05—Questions
Frequently Asked Questions
How did Lowe's financial performance in fiscal year 2023 compare to the prior year?
In fiscal year 2023, Lowe's experienced a decrease in net sales by 11.0% to $86.4 billion, largely due to the divestiture of its Canadian retail business and a 4.7% decline in comparable sales. However, net earnings saw a significant increase of 20.0% to $7.7 billion, and diluted earnings per share improved to $13.20, partly due to cost efficiencies and favorable one-time adjustments from the prior year's Canadian business sale.
What are Lowe's key strategic priorities and how are they impacting the business?
Lowe's strategic priorities revolve around its 'Total Home' strategy, which includes enhancing the customer experience, being a great place to work, and improving communities. Key pillars are driving Pro penetration, accelerating the online business, expanding installation services, localization, and elevating product assortment. While facing macroeconomic headwinds impacting DIY sales, the company has seen positive comparable sales in its Pro segment due to focused investments.
How is Lowe's managing its capital and returning value to shareholders?
Lowe's generated robust cash flow from operations of $8.1 billion in fiscal 2023. The company demonstrated a strong commitment to shareholder returns by repurchasing $6.3 billion of its common stock and paying $2.5 billion in dividends. As of February 2, 2024, Lowe's had $14.6 billion remaining under its share repurchase program, indicating continued focus on returning capital.
What are the primary challenges or risks Lowe's faces, as highlighted in the filing?
Lowe's faces risks including adapting to evolving retail environments and changing customer shopping habits, potential disruptions in its supply chain, intense competition, and the need to attract and retain qualified associates. Macroeconomic factors like inflation and interest rates also pose challenges, particularly impacting DIY customer demand for discretionary purchases. Cybersecurity threats and the ability to maintain product and service quality are also noted as significant risks.
06—Continue