Lowe's quarterly net earnings up 27.8%

Lowe's Companies Inc. (NYSE: LOW), the world's second-largest home improvement retailer, reported net earnings of $597 million for the quarter ended Aug. 1, a 27.8 percent increase over the same period a year ago.

Diluted earnings per share increased 27.1 percent to 75 cents from 59 cents in the second quarter of 2002.

Sales for the quarter increased 17.2 percent to $8.77 billion, up from $7.49 billion in the second quarter of 2002. Comparable store sales for the second quarter increased 6.9 percent.

"As we had expected, Americans' passion for home improvement projects surged as the weather improved across most of the U.S.," said Robert L. Tillman, Lowe's chairman and CEO, in a press release. "As a result of the continuing commitment to improve the home, we experienced sales strength in every product category, including big ticket items, and in every region of the country. The continuing success of our internal sales and performance initiatives, as well as signs of an improving macro-economic climate, keep us optimistic for the back half of the year."

Added Lowe's President Robert A. Niblock: "A strategic investment in inventory and an effective marketing program allowed Lowe's to capitalize on a compressed spring selling season."

During the quarter, Lowe's opened 24 new stores, including two relocations, and closed one older, smaller store. As of Aug. 1, Lowe's operated 896 stores in 45 states representing 99.7 million square feet of retail selling space, a 12.5 percent increase over last year.

Lowe's business outlook

This outlook is based on current expectations and includes "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act.

In third quarter 2003:

the company expects to open 38 stores reflecting square footage growth of approximately 14 percent;

total sales are expected to increase approximately 16 percent to 17 percent;

the company expects to report comparable store sales with an increase of 5 percent to 6 percent from third-quarter 2002;

operating margin (defined as gross margin less selling, general and administrative costs and depreciation) is expected to increase 20 to 30 basis points from third-quarter 2002;

store opening costs are expected to be approximately $44 million;

diluted earnings per share of 50 cents to 51 cents are expected; and

Lowe's third quarter ends on Oct. 31 with operating results to be publicly released Nov. 17.

In fiscal year 2003:

The company expects to open 130 stores reflecting total square footage growth of approximately 15 percent;

Total sales are expected to increase approximately 16 percent for the year over fiscal year 2002;

The company expects to report a comparable store sales increase of 4 percent to 5 percent from fiscal year 2002;

Operating margin (defined as gross margin less selling, general and administrative costs and depreciation) is expected to increase 40 to 50 basis points from fiscal year 2002;

Store opening costs are expected to be approximately $140 million; and

Diluted earnings per share of $2.24 to $2.27 are expected for the fiscal year ending Jan. 30, 2004.

With fiscal year 2002 sales of $26.5 billion, Lowe's Companies Inc. is a Fortune 100 company that serves approximately 9 million customers a week at more than 875 home improvement stores in 45 states.

In 2003, Fortune magazine named Lowe's America's Most Admired Specialty Retailer. Based in Wilkesboro, N.C., the 57-year old company is the second-largest home improvement retailer in the world.