Lowe's Earnings Beat Expectations
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Lowe's Cos. (LOW), which operates the nation's second biggest home improvement chain, said Monday its earnings rose 15.5 percent in third quarter on a 16.2 percent increase in sales.
Lowe's executives said they were confident about future earnings growth, citing a robust national housing market and a rebound in employment.
Lowe's, which trails only Home Depot Inc. (HD) in the home improvement business, said it earned $522 million, or 66 cents a share, in the three months ended Oct. 29, surpassing Wall Street's expectations by a penny a share. It earned $452 million, or 56 cents a share, a year earlier.
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Sales for the third quarter were $9.1 billion, up from $7.8 billion in the third quarter of 2003. Comparable store sales — a measure of sales in stores open at least one year — increased 5.2 percent for the quarter.
"A 5.2 percent increase in comparable store sales on top of the 12.2 percent increase in last year's third quarter represents the best two-year performance for Lowe's in nearly a decade," said Lowe's president Robert Niblock.
For the first nine months of 2004, net earnings grew 14 percent to $1.68 billion, or $2.11 a share, up from $1.47 billion, or $1.84 a share, a year earlier. Sales increased 18.3 percent to $27.9 billion for the first nine months from $23.6 billion a year ago. Comparable store sales increased 6.6 percent.
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Lowe's executives said they were confident about the fourth quarter and beyond.
"Continued signs of a robust housing market, improving employment and strong demographic trends provide a foundation for our optimism for the future," Robert Tillman, chairman and chief executive, said in a statement.
Looking ahead, the Mooresville, N.C.-based retailer said it expects earnings of 58 to 60 cents per share in the fourth quarter. Analysts surveyed by Thomson First Call expected 60 cents a share in the fourth quarter. The company expects to open 56 stores in the fourth quarter.
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During the quarter, Lowe's opened 35 new stores. Lowe's now operates 1,031 stores in 45 states.
Lowe's shares were down $1.25, or 2.1 percent, to $59 a share on the New York Stock Exchange (search).