Lowe’s Companies, Inc. (NYSE:LOW) reported net earnings of $736 million for the quarter ended October 30, 2015, a 25.8 percent increase over the same period a year ago. Diluted earnings per share increased 35.6 percent to $0.80 from $0.59 in the third quarter of 2014. For the nine months ended October 30, 2015, net earnings increased 12.8 percent from the same period a year ago to $2.5 billion, and diluted earnings per share increased 20.5 percent to $2.70.
Sales for the third quarter increased 5.0 percent to $14.4 billion from $13.7 billion in the third quarter of 2014, and comparable sales increased 4.6 percent. For the nine month period, sales were $45.8 billion, a 4.9 percent increase over the same period a year ago, and comparable sales increased 4.6 percent. Comparable sales for the U.S. home improvement business increased 5.0 percent for the third quarter and 4.9 percent for the nine month period.
“This is an exciting time for Lowe’s as we continue to execute our strategic priorities alongside a favorable macroeconomic backdrop,” commented Robert A. Niblock, Lowe’s chairman, president and CEO. “I am pleased that we delivered another solid quarter. Comparable sales growth was driven by gains in both transactions and average ticket, while our focus on productivity and profitability also allowed us to deliver strong earnings per share growth.”
“I would like to thank our employees for their purposeful commitment to serving customers, particularly those who worked diligently to assist our neighbors that were impacted by the historic flooding in South Carolina,” Niblock added.
Delivering on its commitment to return excess cash to shareholders, the company repurchased $750 millionof stock under its share repurchase program and paid $260 million in dividends in the third quarter. For the nine month period, the company repurchased $3.3 billion of stock under its share repurchase program and paid $700 million in dividends.
As of October 30, 2015, Lowe’s operated 1,849 home improvement and hardware stores in the United States, Canada and Mexico representing 201.6 million square feet of retail selling space.
A conference call to discuss third quarter 2015 operating results is scheduled for today (Wednesday, November 18) at 9:00 am ET. The conference call will be available by webcast and can be accessed by visiting Lowe’s website at www.Lowes.com/investor and clicking on Lowe’s Third Quarter 2015 Earnings Conference Call Webcast. Supplemental slides will be available fifteen minutes prior to the start of the conference call. A replay of the call will be archived on Lowes.com/investor until February 23, 2016.
Lowe’s Business Outlook
Fiscal Year 2015 (comparisons to fiscal year 2014; based on U.S. GAAP unless otherwise noted)
- Total sales are expected to increase 4.5 to 5 percent.
- Comparable sales are expected to increase 4 to 4.5 percent.
- The company expects to add 15 to 20 home improvement and hardware stores.
- Earnings before interest and taxes as a percentage of sales (operating margin) are expected to increase 80 to 100 basis points.
- The effective income tax rate is expected to be approximately 38.1%.
- Diluted earnings per share of approximately $3.29 are expected for the fiscal year ending January 29, 2016. (Original Source)
Shares of Lowe’s Companies closed yesterday at $72.85. LOW has a 1-year high of $76.25 and a 1-year low of $57.96. The stock’s 50-day moving average is $72.36 and its 200-day moving average is $69.86.
On the ratings front, Lowe’s Companies has been the subject of a number of recent research reports. In a report issued on November 4, Deutsche Bank analyst Michael Baker maintained a Buy rating on LOW, with a price target of $80, which implies an upside of 9.8% from current levels. Separately, on October 22, Oppenheimer’s Brian Nagel reiterated a Buy rating on the stock and has a price target of $85.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Michael Baker and Brian Nagel have a total average return of -4.2% and 7.4% respectively. Baker has a success rate of 42.4% and is ranked #3370 out of 3849 analysts, while Nagel has a success rate of 59.5% and is ranked #300.
Overall, one research analyst has assigned a Hold rating and 4 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $83.67 which is 14.9% above where the stock closed yesterday.
Lowe’s Companies Inc is a home improvement retailer, which serves home-owners, renters and Commercial Business Customers.