10-QPeriod: Q2 FY2016

LOWES COMPANIES INC Quarterly Report for Q2 Ended May 1, 2015

Filed June 2, 2015For Securities:LOW

Summary

Lowe's Companies, Inc. reported solid financial results for the first quarter of fiscal year 2015, ended May 1, 2015. The company experienced a 5.4% increase in net sales, reaching $14.1 billion, driven by a 5.2% rise in comparable sales across all product categories. This growth was supported by favorable economic indicators and effective execution of strategic initiatives, including staggered Spring Black Friday events and logistics management to mitigate port disruptions. Profitability also saw a healthy increase, with net earnings up 7.8% to $673 million, resulting in a diluted earnings per share of $0.70, a 14.8% increase year-over-year. The company continued its commitment to shareholder returns, paying $222 million in dividends and repurchasing $1.0 billion of common stock during the quarter. Management expressed confidence in the 2015 outlook, citing improving macroeconomic conditions and ongoing strategic priorities.

Financial Highlights

51 data points
Beta

Revenue

$17.35B

34.5% Gross Margin

Net Income

$1.13B

6.5% Net Margin

EPS (Diluted)

$1.20

Total Assets

$32.74B

Cash & Equivalents

$901.00M

Free Cash Flow

$2.25B

Financial Statements
Beta
Revenue$17.35B
Cost of Revenue$11.37B
Gross Profit$5.98B
SG&A Expenses$3.63B
Operating Expenses$4.14B
Net Income$1.13B
EPS (Basic)$1.20
EPS (Diluted)$1.20
Shares Outstanding (Basic)931.00M
Shares Outstanding (Diluted)933.00M

Key Highlights

  • 1Net sales increased by 5.4% to $14.1 billion for the first quarter of fiscal 2015.
  • 2Comparable sales grew by 5.2%, with positive contributions from all 13 product categories.
  • 3Net earnings rose by 7.8% to $673 million, and diluted earnings per share increased by 14.8% to $0.70.
  • 4The company returned $1.0 billion to shareholders through share repurchases in the first quarter.
  • 5Operating margin (EBIT margin) improved significantly, up 76 basis points to 8.72%.
  • 6Return on Invested Capital (ROIC) increased to 14.3% from 12.0% in the prior year's comparable period.
  • 7Despite a slight increase in interest expense due to new debt issuance, the company maintained strong liquidity with no outstanding borrowings under its main credit facility.

Frequently Asked Questions

Lowe's reported a 5.4% increase in net sales to $14.1 billion and a 7.8% increase in net earnings to $673 million. Diluted earnings per share grew by 14.8% to $0.70, demonstrating robust top-line growth and improved profitability.

The company demonstrated a strong commitment to shareholder returns by paying $222 million in dividends and repurchasing $1.0 billion of its common stock during the first quarter of fiscal 2015. A significant portion of these repurchases was executed under a large, ongoing share repurchase program.

Comparable sales increased by 5.2%, driven by both an increase in comparable average ticket (2.9%) and a rise in comparable customer transactions (2.2%). Growth was observed across all 13 product categories, with particular strength noted in Appliances, Outdoor Power Equipment, and Seasonal Living.

Management expressed confidence for fiscal year 2015, expecting total sales to increase by 4% to 5% and comparable sales to grow by 4% to 4.5%. They also anticipated an operating margin increase of 80 to 100 basis points and projected diluted earnings per share of approximately $3.29 for the full year.