Strong Q2 For Lowe's, Home Depot

By Jeff Malester -- TWICE, 9/2/2002

Home Improvement rivals Lowe's and Home Depot both reported strong sales and earnings for their fiscal second quarters, both of which ended in early August. Lowe's reported a 22.2 percent increase in sales for its fiscal second quarter, hitting $7.5 billion, up from $6.1 billion in the year-ago period. Comp-store sales for the second three months increased 6.8 percent.

Net earnings in the second quarter, ended August 2, soared 41.9 percent, to $467.1 million, up from $329.1 million in the same three months in 2001.

Looking at the third quarter, Lowe's expects to open 20 stores, with total sales expected to increase 18 to 19 percent. The retailer expects a comp-store sales increase of 3 percent to 5 percent in the period, as well as a 40 to 50 basis point gross margin improvement.

For the 12 months, Lowe's expects to open 123 stores, with total sales reflecting a 20 percent rise. The retailer expects to report a comp-store sales increase of about 5 percent in its fiscal year. Gross margin is expected to improve by about 85 basis points.

For the six months, Lowe's sales increased 22.4 percent, to $14 billion, up from $11.4 billion in the first half of fiscal 2001. Comp-store sales in the first half of the year hit 7.1 percent. Net earnings for the six months reached $812.9 million, up 46.6 percent from the $554.4 million reported year over year. Home Depot racked up a 12 percent sales increase, to $16.3 billion, in its fiscal second quarter from $14.6 billion in the year-ago period.

Riding high on the boost for company sales by the swift rollout of major appliances, among other categories, the home improvement chain reported net earnings of $1.2 billion for the second quarter, ending August 4. This was a 28 percent increase over the $924 million recorded in the same quarter in 2001.

During the first half, Home Depot reported sales of $30.6 billion, up from $26.8 billion in the same period the previous year. Net earnings came in at $2 billion in the first six months, up from $1.6 billion in the same period in 2001.

The company said it was comfortable with the current earnings estimate for its fiscal year, a 25 percent increase over the previous 12 months.