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November 20, 2018
For 6:00 am ET Release
LOWES REPORTS THIRD QUARTER SALES AND EARNINGS RESULTS
Intends to Exit Retail Operations in Mexico, Alacrity Renovation Services, and Iris Smart Home
Diluted Earnings Per Share of $0.78
Adjusted Diluted Earnings Per Share1 of $1.04
Updates Fiscal 2018 Business Outlook
MOORESVILLE, N.C. Lowes Companies, Inc. (NYSE: LOW) today reported net earnings of $629 million and diluted earnings per share of $0.78 for the quarter ended Nov. 2, 2018, which included pre-tax charges of $280 million further described below, compared to net earnings of $872 million and diluted earnings per share of $1.05 in the third quarter of 2017. Excluding the impact of the charges, adjusted diluted earnings per share1 decreased 1.0 percent to $1.04 compared to the prior year.
Management has substantially completed its strategic reassessment of the business and identified actions to drive focus on its core home improvement business and improve profitability. The company intends to exit its Mexico retail operations and is exploring strategic alternatives. The company has also identified certain non-core activities within its U.S. home improvement business to exit, including Alacrity Renovation Services and Iris Smart Home. These actions are in addition to the previously announced decisions to exit its Orchard Supply Hardware operations, and close 20 underperforming stores in the U.S. and 31 stores and other locations in Canada.
Our top priority in the third quarter was positioning Lowes for long-term success by identifying underperforming or non-core businesses and stores for divestiture, commented Marvin R. Ellison, Lowes president and CEO. With our strategic reassessment substantially completed, we can now intensify our focus on the core retail business.
The $280 million in pre-tax charges recognized in the third quarter and referenced above related to this strategic reassessment, and included the following:
$123 million of accelerated depreciation and amortization, lease and severance obligations, and other costs related to the decision to close all Orchard Supply Hardware locations;
$121 million of long-lived asset impairment and severance obligations related to the decision to close certain underperforming stores in the U.S. and Canada and other locations in Canada;
$22 million of long-lived asset impairment related to the decision to exit retail operations in Mexico, and;
$14 million of long-lived asset impairment and inventory write-down related to the decision to exit certain non-core activities, including Alacrity Renovation Services and Iris Smart Home.
Additional pre-tax charges of $460 to $580 million related to these decisions and consisting of lease obligations, accelerated depreciation and amortization, severance and other costs are expected to be incurred in the fourth quarter of fiscal 2018, and have been reflected in the companys updated business outlook. The amounts, nature and timing of any additional charges associated with the intended exit of its
Adjusted diluted earnings per share is a non-GAAP financial measure. Refer to the Non-GAAP Financial Measures Reconciliation section of this release for additional information as well as a reconciliation between the Companys GAAP and non-GAAP financial results.
The following information was filed by Lowes Companies Inc (LOW) on Tuesday, November 20, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.