Wilkesboro, N.C. - Continued strength of the home improvement consumer in an otherwise uncertain economic environment helped home improvement chain Lowe's Companies register strong third quarter sales and earnings.
Sales jumped 17.6 percent in Lowe's fiscal third quarter, hitting $6.4 billion, up from $5.5 billion in the year-ago period. Comp-store sales for the three months climbed 4.1 percent.
Pumped by its expansion into major metropolitan markets, Lowe's reported net earnings of $339.2 million in the third quarter, ended Nov. 1, a 35.4 percent increase over the same period a year ago, when the retailer registered net earnings of $250.5 million.
Gross margin in the three months increased 140 basis points, to 30.6 percent, up from 29.2 percent in the same period in 2001. At the same time, Selling, General and Administrative (SG&A) expenses climbed 80 basis points, to 18.6 percent, up from 17.8 percent.
For the nine months, sales rose 20.9 percent, reaching $20.4 billion, up from $16.9 billion year-on-year. Comp-store sales increased 6.1 percent.
Net earnings grew 43.1 percent for the nine months, hitting $1.2 billion, compared with $804.9 million in the same nine months a year earlier.
Gross margin in the nine months jumped 140 basis points, to 29.9 percent, compared with 28.5 percent in the same period last year. SG&A expenses rose 20 basis points, to 17.5 percent, from 17.3 percent the previous year.
Lowe's expects total sales to increase 16 percent to 17 percent in its fiscal fourth quarter, compared with the same period in 2001. The retailer anticipates a comp-store sales increase of 2 percent to 4 percent during the three months.
Gross margin is expected to improve 50 to 60 basis points during the fourth quarter, with SG&A expense de-leverage of 10 to 20 basis points.
For the year, the retailer anticipates a sales increase of about 20 percent year-over year, with store comps increasing about 5 percent. Gross margin is expected to improve about 120 basis points.