Lowe’s Beats, Up In Pre-Market

Lowe’s (LOW) beat Wall St. forecasts and is trading up over 5% in the pre-market. LOW  reported net earnings of $1.02 billion for the quarter ended August 3, 2007, a 9.0 percent increase over the same period a year ago. Diluted earnings per share increased 11.7 percent to $0.67 from $0.60 in the second quarter of 2006.

LOW revenue for the quarter increased 5.8 percent to $14.2 billion, up from $13.4 billion in the second quarter of 2006.

LOW Business Outlook
    Third Quarter 2007 (comparisons to third quarter 2006)
    — The company expects to open 40 new stores reflecting square footage
       growth of approximately 10 percent
    — Total sales are expected to increase 7 to 8 percent
    — The company expects approximately flat comparable store sales
    — Operating margin (defined as gross margin less SG&A and depreciation)
       is expected to decline approximately 140 basis points driven by bonus,
       retirement and insurance expenses that had significant leverage in last
       year’s third quarter
    — Store opening costs are expected to be approximately $47 million
    — Diluted earnings per share of $0.43 to $0.45 are expected
    — Lowe’s third quarter ends on November 2, 2007 with operating results to
       be publicly released on Monday, November 19, 2007

    Fiscal Year 2007 (comparisons to fiscal year 2006)
    — The company expects to open 150 to 160 stores in 2007 reflecting total
       square footage growth of approximately 11 percent
    — Total sales are expected to increase approximately 6 percent
    — The company expects comparable store sales to decline approximately 2
       percent
    — Operating margin (defined as gross margin less SG&A and depreciation)
       is expected to decline 70 to 80 basis points
    — Store opening costs are expected to be $135 to $140 million
    — Diluted earnings per share of $1.97 to $2.01 are expected for the
       fiscal year ending February 1, 2008

Douglas A. McIntyre