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Lowe’s Sales Jump 26.4%

2/27/2006 08:55:00 AM Eastern

Mooresville, N.C. — Installed sales, special-order sales and commercial business customers continued to drive business at Lowe’s Companies in the home improvement retailer’s fiscal fourth quarter.

Sales for the three months, ended Feb. 3, soared 26.4 percent, hitting $10.8 billion, up from $8.6 billion in the same period a year earlier. The earlier quarter totaled 13 weeks vs. 14 for the most recent fourth quarter. Comp-store sales increased 7.8 percent vs. a comparable 14-week period.

Net earnings at Lowe’s for its fourth quarter rose to $695 million for the 14-week period, a 36.5 percent rise over the $508 million posted in the 13-week period the prior year. Gross margin was 35.14 percent in the fourth quarter, compared with a year-ago 34.96 percent a year earlier. Expenses decreased to 21.3 percent from 21.5 percent.

During the fourth quarter, the chain opened 63 new stores and reopened one store temporarily closed as a result of Hurricane Katrina. At the end of the fourth quarter, the company operated 1,234 stores in 49 states. It expects to open 155 stores in 2006.

“Our strong fourth quarter and fiscal year represent a focus on execution and a culture of customer service that solidifies Lowe’s competitive position across the country,” said Robert Niblock, chairman/CEO.

“As we continue to monitor the changing economic environment, including housing-related metrics, employment, real wage growth and demographic trends, we have confidence in our future performance as the outlook for home improvement spending remains strong.”

For the fiscal year, sales climbed 18.6 percent, reaching $43.2 billion, up from $36.5 billion. Comp-store sales increased 6.1 percent.

Net income for the year grew by 27.3 percent to $2.8 billion from a year-ago $2.2 billion.

Gross margin for the 12 months came in at 34.3 percent vs. a year-on-year 33.7 percent. Expenses for the 12 months edged upward to 20.8 percent from a year-earlier 20.7 percent.

Lowe’s said quarterly comparisons in 2006 will be impacted by a shift in comparable weeks to 2005. This shift positively impacts the current first quarter, ending after April, and is offset by negative impacts in the second and fourth quarters. In the current first quarter, Lowe’s anticipates a 19 percent to 20 percent rise in sales, with comps up 5 percent to 7 percent.

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