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Lowe’s Sales Jump 17.3%

8/16/2004 10:01:00 AM Eastern

Mooresville, N.C. — A “strong and vibrant housing market” helped elevate fiscal second-quarter sales 17.3 percent at Lowe’s, hitting $10.2 billion, up from $8.7 billion. Comp-store sales climbed 5.1 percent in the period.

The home improvement retailer reported net earnings of $704 million for the three months, ended July 30, a 17.9 percent jump over the $597 million recorded in the fiscal second quarter of 2003.

Sales weakened in June, following a solid start to the quarter, due to adverse weather in many parts of the country impacting the consumer’s ability to initiate typical late spring and early summer projects, said Lowe’s. Sales rebounded in July, and the retailer said it was pleased with the direction of the business as the quarter ended.

“Robust housing turnover, record home ownership, attractive mortgage rates and improving consumer confidence highlighted a solid performance in the second quarter,” said Robert Niblock, president.

Lowe’s, which opened 20 new stores in the second quarter, including three relocations, expects to open 33 locations in the third quarter at a cost of about $35 million. Third-quarter sales are anticipated to increase about 15 percent, although comps are expected to range from 3 percent to 4 percent and operating margin, or gross margin less expenses and depreciation, is expected to remain flat.

For the six months, Lowe’s reported a 19.4 percent rise in sales, reaching $18.9 billion, up from $15.8 billion year-on-year. Comps for the six months increased 7.2 percent, while net earnings jumped 14 percent to $1.16 billion from $1.02 billion.

In the fiscal year, the retailer anticipates opening 140 stores at a cost of $128 million, with total sales rising about 18 percent and comps increasing about 6 percent. Operating margin is expected to fall less than one-half percent.

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