LOWE'S REPORTS FOURTH QUARTER 2021 SALES AND EARNINGS RESULTS
Lowe's Companies reported strong financial results for the fourth quarter ended January 28, 2022, with net earnings of $1.2 billion and diluted EPS of $1.78, up from $978 million and $1.32 in Q4 2020. Total sales increased to $21.3 billion, a 5.0% rise year-over-year. Comparable sales for the U.S. home improvement business grew 5.1%, while Pro customer sales surged 23%. The company raised its 2022 sales outlook to $97 billion to $99 billion and plans to repurchase approximately $12 billion in shares.
- Net earnings increased to $1.2 billion, reflecting strong financial performance.
- Diluted EPS rose to $1.78, a 34% increase from adjusted EPS of $1.33 in Q4 2020.
- Total sales reached $21.3 billion, a 5.0% year-over-year growth.
- Pro customer sales surged by 23%, indicating strong demand.
- Company raised 2022 sales outlook to $97 billion to $99 billion.
- Approximately $12 billion planned for share repurchases.
- Comparable sales for 2022 are expected to range from a decline of 1% to an increase of 1%, indicating potential volatility.
MOORESVILLE, N.C., Feb. 23, 2022 /PRNewswire/ -- Lowe's Companies, Inc. (NYSE: LOW) today reported net earnings of
Total sales for the fourth quarter were
In the fourth quarter, the company awarded a discretionary year-end bonus of
"We delivered another year of outstanding performance in 2021, as we gained market share across DIY and Pro through our Total Home strategy. I would like to thank our front-line associates for their tremendous efforts this year," commented Marvin R. Ellison, Lowe's chairman, president and CEO. "In 2021, we increased comparable sales by
Capital Allocation
The company remains committed to a best-in-class capital allocation strategy focused on driving long-term, sustainable shareholder value. The company repurchased approximately 16 million shares for
The company also paid
Lowe's Business Outlook |
The company delivered very strong financial results in 2021, with sales momentum continuing in February. While the business environment remains somewhat uncertain, the company is raising its outlook for the operating results of Full Year 2022.
Full Year 2022 Outlook -- a 53-week Year (comparisons to full year 2021 -- a 52-week year)
- Total sales of
$97 billion to$99 billion , including the 53rd week - 53rd week expected to increase total sales by approximately
$1.0 billion to$1.5 billion - Comparable sales expected to range from a decline of
1% to an increase of1% - Gross margin rate up slightly compared to prior year
- Depreciation and amortization of approximately
$1.75 billion - Operating income as a percentage of sales (operating margin) of
12.8% to13.0% - Interest expense of
$1.0 to$1.1 billion - Effective income tax rate of approximately
25% - Diluted earnings per share of
$13.10 to$13.60 - Total share repurchases of approximately
$12 billion - ROIC2 of over
36% - Capital expenditures of approximately
$2 billion
A conference call to discuss fourth quarter 2021 operating results is scheduled for today, Wednesday, February 23, 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 Fourth 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.
As of January 28, 2022, Lowe's operated 1,971 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 Companies, Inc. |
Lowe's Companies, Inc. (NYSE: LOW) is a FORTUNE® 50 home improvement company serving approximately 19 million customer transactions a week in the United States and Canada. With fiscal year 2021 sales of over
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.
LOW-IR
Contacts: | Shareholder/Analyst Inquiries: | Media Inquiries: | |
Kate Pearlman | Steve Salazar | ||
704-775-3856 | 704-758-4345 | ||
1 Adjusted diluted earnings per share is a non-GAAP financial measure. Refer to the "Non-GAAP Financial Measures Reconciliation" section of this release for additional information as well as reconciliations between the Company's GAAP and non-GAAP financial results.
2 Return on Invested Capital (ROIC) is calculated using a non-GAAP financial measure. The Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort.
Lowe's Companies, Inc. Consolidated Statements of Current and Retained Earnings/(Accumulated Deficit) (Unaudited) In Millions, Except Per Share and Percentage Data | |||||||||||||||
Three Months Ended | Fiscal Year Ended | ||||||||||||||
January 28, 2022 | January 29, 2021 | January 28, 2022 | January 29, 2021 | ||||||||||||
Current Earnings | Amount | % Sales | Amount | % Sales | Amount | % Sales | Amount | % Sales | |||||||
Net sales | $ 21,339 | 100.00 | $ 20,311 | 100.00 | $ 96,250 | 100.00 | $ 89,597 | 100.00 | |||||||
Cost of sales | 14,312 | 67.07 | 13,855 | 68.22 | 64,194 | 66.70 | 60,025 | 66.99 | |||||||
Gross margin | 7,027 | 32.93 | 6,456 | 31.78 | 32,056 | 33.30 | 29,572 | 33.01 | |||||||
Expenses: | |||||||||||||||
Selling, general and administrative | 4,741 | 22.21 | 4,541 | 22.36 | 18,301 | 19.01 | 18,526 | 20.68 | |||||||
Depreciation and amortization | 437 | 2.05 | 391 | 1.92 | 1,662 | 1.73 | 1,399 | 1.56 | |||||||
Operating income | 1,849 | 8.67 | 1,524 | 7.50 | 12,093 | 12.56 | 9,647 | 10.77 | |||||||
Interest – net | 235 | 1.11 | 204 | 1.00 | 885 | 0.92 | 848 | 0.95 | |||||||
Loss on extinguishment of debt | — | — | — | — | — | — | 1,060 | 1.18 | |||||||
Pre-tax earnings | 1,614 | 7.56 | 1,320 | 6.50 | 11,208 | 11.64 | 7,739 | 8.64 | |||||||
Income tax provision | 408 | 1.91 | 342 | 1.69 | 2,766 | 2.87 | 1,904 | 2.13 | |||||||
Net earnings | $ 1,206 | 5.65 | $ 978 | 4.81 | $ 8,442 | 8.77 | $ 5,835 | 6.51 | |||||||
Weighted average common shares outstanding – | 673 | 734 | 696 | 748 | |||||||||||
Basic earnings per common share (1) | $ 1.79 | $ 1.33 | $ 12.07 | $ 7.77 | |||||||||||
Weighted average common shares outstanding – | 676 | 735 | 699 | 750 | |||||||||||
Diluted earnings per common share (1) | $ 1.78 | $ 1.32 | $ 12.04 | $ 7.75 | |||||||||||
Cash dividends per share | $ 0.80 | $ 0.60 | $ 3.00 | $ 2.30 | |||||||||||
Retained Earnings/(Accumulated Deficit) | |||||||||||||||
Balance at beginning of period | $ (1,913) | $ 3,942 | $ 1,117 | $ 1,727 | |||||||||||
Net earnings | 1,206 | 978 | 8,442 | 5,835 | |||||||||||
Cash dividends declared | (537) | (440) | (2,081) | (1,724) | |||||||||||
Share repurchases | (3,871) | (3,363) | (12,593) | (4,721) | |||||||||||
Balance at end of period | $ (5,115) | $ 1,117 | $ (5,115) | $ 1,117 | |||||||||||
(1) | Under the two-class method, earnings per share is calculated using net earnings allocable to common shares, which is derived by reducing net earnings by the earnings allocable to participating securities. Net earnings allocable to common shares used in the basic and diluted earnings per share calculation were |
Lowe's Companies, Inc. Consolidated Statements of Comprehensive Income (Unaudited) In Millions, Except Percentage Data | |||||||||||||||
Three Months Ended | Fiscal Year Ended | ||||||||||||||
January 28, 2022 | January 29, 2021 | January 28, 2022 | January 29, 2021 | ||||||||||||
Amount | % Sales | Amount | % Sales | Amount | % Sales | Amount | % Sales | ||||||||
Net earnings | $ 1,206 | 5.65 | $ 978 | 4.81 | $ 8,442 | 8.77 | $ 5,835 | 6.51 | |||||||
Foreign currency translation adjustments – net | (82) | (0.38) | 105 | 0.52 | (4) | — | 78 | 0.09 | |||||||
Cash flow hedges – net of tax | 53 | 0.25 | 5 | 0.02 | 109 | 0.11 | (79) | (0.09) | |||||||
Other | (1) | (0.01) | (1) | — | (5) | (0.01) | 1 | — | |||||||
Other comprehensive (loss)/income | (30) | (0.14) | 109 | 0.54 | 100 | 0.10 | — | — | |||||||
Comprehensive income | $ 1,176 | 5.51 | $ 1,087 | 5.35 | $ 8,542 | 8.87 | $ 5,835 | 6.51 | |||||||
Lowe's Companies, Inc. Consolidated Balance Sheets (Unaudited) In Millions, Except Par Value Data | ||||
January 28, 2022 | January 29, 2021 | |||
Assets | ||||
Current assets: | ||||
Cash and cash equivalents | $ 1,133 | $ 4,690 | ||
Short-term investments | 271 | 506 | ||
Merchandise inventory – net | 17,605 | 16,193 | ||
Other current assets | 1,051 | 937 | ||
Total current assets | 20,060 | 22,326 | ||
Property, less accumulated depreciation | 19,071 | 19,155 | ||
Operating lease right-of-use assets | 4,108 | 3,832 | ||
Long-term investments | 199 | 200 | ||
Deferred income taxes – net | 164 | 340 | ||
Other assets | 1,038 | 882 | ||
Total assets | $ 44,640 | $ 46,735 | ||
Liabilities and shareholders' (deficit)/equity | ||||
Current liabilities: | ||||
Current maturities of long-term debt | $ 868 | $ 1,112 | ||
Current operating lease liabilities | 636 | 541 | ||
Accounts payable | 11,354 | 10,884 | ||
Accrued compensation and employee benefits | 1,561 | 1,350 | ||
Deferred revenue | 1,914 | 1,608 | ||
Other current liabilities | 3,335 | 3,235 | ||
Total current liabilities | 19,668 | 18,730 | ||
Long-term debt, excluding current maturities | 23,859 | 20,668 | ||
Noncurrent operating lease liabilities | 4,021 | 3,890 | ||
Deferred revenue – Lowe's protection plans | 1,127 | 1,019 | ||
Other liabilities | 781 | 991 | ||
Total liabilities | 49,456 | 45,298 | ||
Shareholders' (deficit)/equity: | ||||
Preferred stock, | — | — | ||
Common stock, | 335 | 366 | ||
Capital in excess of par value | — | 90 | ||
(Accumulated deficit)/retained earnings | (5,115) | 1,117 | ||
Accumulated other comprehensive loss | (36) | (136) | ||
Total shareholders' (deficit)/equity | (4,816) | 1,437 | ||
Total liabilities and shareholders' (deficit)/equity | $ 44,640 | $ 46,735 | ||
Lowe's Companies, Inc. Consolidated Statements of Cash Flows (Unaudited) In Millions | |||
Fiscal Year Ended | |||
January 28, 2022 | January 29, 2021 | ||
Cash flows from operating activities: | |||
Net earnings | $ 8,442 | $ 5,835 | |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Depreciation and amortization | 1,882 | 1,594 | |
Noncash lease expense | 517 | 479 | |
Deferred income taxes | 135 | (108) | |
Loss on property and other assets – net | 34 | 139 | |
Loss on extinguishment of debt | — | 1,060 | |
Share-based payment expense | 230 | 155 | |
Changes in operating assets and liabilities: | |||
Merchandise inventory – net | (1,413) | (2,967) | |
Other operating assets | (23) | 326 | |
Accounts payable | 466 | 3,211 | |
Deferred revenue | 413 | 512 | |
Other operating liabilities | (570) | 813 | |
Net cash provided by operating activities | 10,113 | 11,049 | |
Cash flows from investing activities: | |||
Purchases of investments | (3,065) | (3,094) | |
Proceeds from sale/maturity of investments | 3,293 | 2,926 | |
Capital expenditures | (1,853) | (1,791) | |
Proceeds from sale of property and other long-term assets | 113 | 90 | |
Other – net | (134) | (25) | |
Net cash used in investing activities | (1,646) | (1,894) | |
Cash flows from financing activities: | |||
Net change in commercial paper | — | (941) | |
Net proceeds from issuance of debt | 4,972 | 7,929 | |
Repayment of debt | (2,118) | (5,618) | |
Proceeds from issuance of common stock under share-based payment plans | 132 | 152 | |
Cash dividend payments | (1,984) | (1,704) | |
Repurchases of common stock | (13,012) | (4,971) | |
Other – net | (6) | (38) | |
Net cash used in financing activities | (12,016) | (5,191) | |
Effect of exchange rate changes on cash | (8) | 10 | |
Net (decrease)/increase in cash and cash equivalents | (3,557) | 3,974 | |
Cash and cash equivalents, beginning of period | 4,690 | 716 | |
Cash and cash equivalents, end of period | $ 1,133 | $ 4,690 | |
Lowe's Companies, Inc.
Non-GAAP Financial Measure Reconciliation (Unaudited)
To provide additional transparency, the Company has presented a comparison to the non-GAAP financial measure of adjusted diluted earnings per share for the three months ended January 29, 2021. This measure excludes the impact of a discrete item, further described below, not contemplated in Lowe's Business Outlook for the fourth quarter of fiscal 2020 to assist analysts and investors in understanding operational performance for the fourth 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 fourth 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 fourth quarter of fiscal 2020, the Company recognized
$12 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.
A detailed reconciliation between the Company's GAAP and non-GAAP financial results is shown below and available on the Company's website at ir.lowes.com.
Three Months Ended | |||||
January 29, 2021 | |||||
Pre-Tax | Tax | Net | |||
Diluted earnings per share, as reported | $ 1.32 | ||||
Non-GAAP adjustments – per share impacts | |||||
Canada restructuring | 0.01 | — | 0.01 | ||
Adjusted diluted earnings per share | $ 1.33 | ||||
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SOURCE Lowe's Companies, Inc.
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