Lowe’s Reports 2nd Quarter 2021 Sales & Earnings Results
MOORESVILLE, N.C., Aug. 18, 2021 — Lowe’s Companies, Inc. (NYSE: LOW) today reported net earnings of $3.0 billion and diluted earnings per share (EPS) of $4.25 for the quarter ended July 30, 2021 compared to net earnings of $2.8 billion and diluted EPS of $3.74 in the second quarter of 2020. Excluding charges in the prior-year period related to the strategic review of certain operations, second quarter diluted EPS of $4.25 increased 13% from adjusted diluted EPS of $3.75 in the second quarter of 20201.
Total sales for the second quarter were $27.6 billion compared to $27.3 billion in the second quarter of 2020, and comparable sales decreased 1.6%. Comparable sales for the U.S. home improvement business decreased 2.2% for the second quarter.
For the sixth consecutive quarter, 100% of Lowe’s stores earned a Winning Together profit-sharing bonus, resulting in an expected total payout of $91 million to front-line hourly associates. This payment is $20 million above the target level.
“Our strong results this quarter demonstrate that our Total Home strategy is working, with U.S. sales comps up 32% on a two-year basis. In the quarter, we drove 21% growth in Pro, 10% growth in Installation Services and strong comps across Décor product categories. On Lowes.com, sales grew 7% on top of 135% growth last year. We also delivered significant operating margin expansion through our disciplined focus on driving productivity across the company,” commented Marvin R. Ellison, Lowe’s chairman, president and CEO. “I would like to thank our front-line associates for their continued dedication to serving our customers and supporting safety in our stores. Looking forward, I am confident in the positive outlook for our industry, and our ability to drive operating margin expansion and market share gains.”
The Company continues to leverage its disciplined capital allocation program to deliver long-term, sustainable shareholder value. During the quarter, the Company repurchased 16.4 million shares for $3.1 billion and paid $430 million in dividends.
As of July 30, 2021, Lowe’s operated 1,973 home improvement and hardware stores in the United States and Canada representing 208 million square feet of retail selling space, and it serviced approximately 230 dealer-owned stores.
Lowe’s Business Outlook
The Company delivered very strong financial results in the first half of 2021, with strong sales trends continuing into August. While the business environment remains uncertain, the Company is raising its outlook for the operating results of Full Year Fiscal 2021.
Full Year 2021 Financial Outlook (comparisons to full year 2020)
- Revenue of approximately $92 billion, representing approximately 30% comparable sales growth on a two-year basis.
- Gross margin rate up slightly, compared to prior year.
- Operating income as a percentage of sales (operating margin) of 12.2%.
- Share repurchase of a minimum of $9 billion.
For Fiscal 2021, the Company expects capital expenditures of approximately $2 billion.
A conference call to discuss second quarter 2021 operating results is scheduled for today, Wednesday, August 18, at 9:00 am ET. The conference call will be available by webcast and can be accessed by visiting Lowe’s website at ir.lowes.com and clicking on Lowe’s Second Quarter 2021 Earnings Conference Call Webcast. Supplemental slides will be available approximately 15 minutes prior to the start of the conference call. A replay of the call will be archived at ir.lowes.com.
Lowe’s Companies, Inc.
Lowe’s Companies, Inc. (NYSE: LOW) is a FORTUNE® 50 home improvement company serving approximately 20 million customers a week in the United States and Canada. With fiscal year 2020 sales of nearly $90 billion, Lowe’s and its related businesses operate or service more than 2,200 home improvement and hardware stores and employ over 300,000 associates. Based in Mooresville, N.C., Lowe’s supports the communities it serves through programs focused on creating safe, affordable housing and helping to develop the next generation of skilled trade experts. For more information, visit Lowes.com.
Disclosure Regarding Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements including words such as “believe”, “expect”, “anticipate”, “plan”, “desire”, “project”, “estimate”, “intend”, “will”, “should”, “could”, “would”, “may”, “strategy”, “potential”, “opportunity”, “outlook”, “scenario”, “guidance”, and similar expressions are forward-looking statements. Forward-looking statements involve, among other things, expectations, projections, and assumptions about future financial and operating results, objectives, business outlook, priorities, sales growth, shareholder value, capital expenditures, cash flows, the housing market, the home improvement industry, demand for products and services, share repurchases, Lowe’s strategic initiatives, including those relating to acquisitions and dispositions and the impact of such transactions on our strategic and operational plans and financial results. Such statements involve risks and uncertainties and we can give no assurance that they will prove to be correct. Actual results may differ materially from those expressed or implied in such statements.
A wide variety of potential risks, uncertainties, and other factors could materially affect our ability to achieve the results either expressed or implied by these forward-looking statements including, but not limited to, changes in general economic conditions, such as the rate of unemployment, interest rate and currency fluctuations, fuel and other energy costs, slower growth in personal income, changes in consumer spending, changes in the rate of housing turnover, the availability of consumer credit and of mortgage financing, changes in commodity prices, trade policy changes or additional tariffs, outbreaks of public health crises, such as the COVID-19 pandemic, availability and cost of goods from suppliers, and other factors that can negatively affect our customers.
Investors and others should carefully consider the foregoing factors and other uncertainties, risks and potential events including, but not limited to, those described in “Item 1A – Risk Factors” in our most recent Annual Report on Form 10-K and as may be updated from time to time in Item 1A in our quarterly reports on Form 10-Q or other subsequent filings with the SEC. All such forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update these statements other than as required by law.
Non-GAAP Financial Measures Reconciliation (Unaudited)
To provide additional transparency, the Company has presented the non-GAAP financial measure of adjusted diluted earnings per share for the three months ended July 31, 2020. This measure excludes the impact of a discrete item, further described below, not contemplated in Lowe’s Business Outlook for the second quarter of fiscal 2020 to assist analysts and investors in understanding operational performance for the second quarter of fiscal 2020.
Fiscal 2020 Impacts
During fiscal 2020, the Company recognized financial impacts from the following discrete item, not contemplated in the Company’s Business Outlook for the second quarter:
- Beginning in the third quarter of fiscal 2019, the Company began a strategic review of its Canadian operations, and in the fourth quarter of fiscal 2019, the Company announced additional actions to improve future performance and profitability of its Canadian operations. As a result of this review and related actions, in the second quarter of fiscal 2020, the Company recognized $10 million of pre-tax operating costs related to inventory write-downs and other closing costs (Canada restructuring).
Adjusted diluted earnings per share should not be considered an alternative to, or more meaningful indicator of, the Company’s diluted earnings per share as prepared in accordance with GAAP. The Company’s methods of determining non-GAAP financial measures may differ from the method used by other companies and may not be comparable.
Republished from Lowe’s Companies, Inc. corporate news site as first published on /PRNewswire/