Summary
Lowe's Companies, Inc. (LOW) reported its financial results for the fiscal second quarter ended August 3, 2012. While net sales saw a slight decrease of 2.0% to $14.2 billion compared to the prior year, this was partially due to a one-week shift in fiscal 2011. Comparable store sales experienced a minor decline of 0.4%, indicating a challenging retail environment. The company's gross margin also decreased by 56 basis points, primarily attributed to increased promotional activity and price reductions. Despite the top-line pressures, Lowe's demonstrated proactive capital management. The company announced the issuance of $2.0 billion in unsecured notes in April 2012 to strengthen its financial position and continued its aggressive share repurchase program, buying back $2.79 billion in the first half of the fiscal year. Management's outlook anticipates continued transformation efforts aimed at improving customer experience and sales growth, with an expectation for earnings per share to reach $1.64 for fiscal year 2012.
Financial Highlights
47 data points| Revenue | $14.25B |
| Cost of Revenue | $9.41B |
| Gross Profit | $4.83B |
| SG&A Expenses | $3.17B |
| Operating Expenses | $3.64B |
| Net Income | $747.00M |
| EPS (Basic) | $0.64 |
| EPS (Diluted) | $0.64 |
| Shares Outstanding (Basic) | 1.16B |
| Shares Outstanding (Diluted) | 1.16B |
Key Highlights
- 1Net sales for the quarter were $14.2 billion, a 2.0% decrease year-over-year, impacted by a one-week fiscal calendar shift in the prior year.
- 2Comparable store sales declined by 0.4%, with a 0.8% decrease in customer transactions, partially offset by a 0.4% increase in average ticket price.
- 3Gross margin decreased by 56 basis points to 33.93% of sales, primarily due to promotional activity and price reductions.
- 4Selling, general, and administrative (SG&A) expenses deleveraged slightly as a percentage of sales, impacted by store payroll and bonus expenses.
- 5The company issued $2.0 billion in unsecured notes in April 2012 and utilized $2.79 billion for share repurchases in the first half of the fiscal year.
- 6Lowe's repurchased approximately 36.9 million shares of common stock in the second quarter.
- 7The company's outlook for fiscal year 2012 projects total sales to be flat to slightly increasing and diluted earnings per share of $1.64.