Lowe’s Reports Third Quarter 2022 Sales and Earnings Results

Lowe’s Companies, Inc. today reported net earnings of $154 million and diluted earnings per share (EPS) of $0.25 for the quarter ended Oct. 28, 2022, which included a pre-tax non-cash asset impairment charge of $2.1 billion related to its Canadian retail business, compared to diluted EPS of $2.73 in the third quarter of 2021. Excluding the impairment charge, third quarter adjusted diluted EPS¹ increased 19.8% to $3.27 compared to the prior year.

Total sales for the third quarter were $23.5 billion compared to $22.9 billion in the third quarter of 2021, and comparable sales increased 2.2%. Comparable sales for the U.S. home improvement business increased 3.0% for the third quarter.

“We delivered better-than-expected results this quarter, with U.S. comps up 3%, driven by Pro growth of 19% and improved DIY sales trends.  Sales on Lowes.com grew 12%, on top of 25% growth last year.  We also drove substantial improvement in adjusted operating margin through disciplined execution and cost management.  This enabled us to award $200 million in bonuses to our front-line hourly associates, while also announcing $170 million in permanent wage increases,” commented Marvin R. Ellison, Lowe’s chairman, president and CEO.  “I am pleased that we are once again able to share the success of the company with our hard-working front-line associates, and I look forward to discussing our next chapter of growth at our Analyst & Investor Conference in December.” 

Capital Allocation

With a disciplined focus on its leading capital allocation program, the company continues to generate long-term shareholder value. During the quarter, the company repurchased approximately 20.5 million shares for $4.0 billion, and it paid $666 million in dividends.

As of Oct. 28, 2022, Lowe’s operated 1,969 home improvement and hardware stores in the U.S. and Canada representing 208 million square feet of retail selling space, and it serviced approximately 212 dealer-owned stores.

The company is increasing its full year 2022 financial outlook reflecting stronger-than-expected operating results.

All Adjusted measures exclude asset impairment and expected transaction costs associated with the sale of our Canadian retail business, which is currently expected to close in early 2023.

Full Year 2022 Outlook — a 53-week Year (comparisons to full year 2021 — a 52-week year)

• Total sales of approximately $97 – $98 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 be flat to down -1% as compared to prior year
• Gross margin rate up slightly compared to prior year
• Depreciation and amortization of approximately $1.75 billion
• Adjusted operating income² as a percentage of sales (adjusted operating margin²) of 13.0%
• Interest expense of $1.1 to $1.2 billion
• Adjusted effective income tax rate² of approximately 25%
• Adjusted diluted earnings per share² of $13.65 to $13.80 (previously $13.10 to $13.60)
• Total share repurchases of approximately $13 billion (previously $12 billion)
• Adjusted ROIC² of over 37%
• Capital expenditures of up to $2 billion

The Canadian retail business represents less than 6% of consolidated full year 2022 sales outlook, and approximately 60 basis points of dilution on the consolidated full year 2022 operating margin outlook.

For the complete press release, click here.

About 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 $96 billion, Lowe’s and its related businesses operate or service nearly 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.

Source: Lowe’s Companies, Inc.