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Lowe’s reports $663M in net earnings

Lowe’s Companies Inc. has reported net earnings of $663 million and diluted earnings per share of $0.74 for the quarter ended February 3, compared to net earnings of $11 million and diluted earnings per share of $0.01 in the fourth quarter of 2015. Excluding certain items described below, adjusted diluted earnings per share increased 45.8 percent to $0.86 from adjusted diluted earnings per share of $0.59 in the fourth quarter of 2015.

The items in question for the fourth quarter consisted of the following:

  • $0.06 per share for severance-related costs associated with the company’s productivity efforts;
  • $0.04 per share for a tax charge primarily related to the issuance of final Internal Revenue Code Section 987 regulations in December 2016; and
  • $0.02 per share for the premium paid to acquire the outstanding RONA preferred shares.

For the fiscal year ending February 3, net earnings were $3.1 billion and diluted earnings per share were $3.47 compared to net earnings of $2.5 billion and diluted earnings per share of $2.73 in fiscal 2015. Excluding certain items, adjusted diluted earnings per shar increased 21.3 percent to $3.99 from adjusted diluted earnings per share of $3.29 in fiscal 2015.

In addition to those items, the fiscal year also included the following:

  • $0.05 per share for the net gain on the settlement of a foreign currency hedge entered into in advance of the company’s acquisition of RONA in the first half of the year;
  • $0.33 per share for a charge related to the joint venture with Woolworths in Australia recognized in the third quarter;
  • $0.07 per share for project write-offs recognized in the third quarter that were canceled as a part of the company’s ongoing review of strategic initiatives in an effort to focus on the critical projects that will drive desired outcomes; and
  • $0.05 per share for goodwill and long-lived asset impairment charges associated with the company’s Orchard Supply Hardware operations as part of a strategic reassessment of this business during the third quarter.

Sales for the fourth quarter increased 19.2 percent to $15.8 billion from $13.2 billion in the fourth quarter of 2015, and comparable sales increased 5.1 percent. For the fiscal year, sales were $65 billion, a 10.1 percent increase over the same period a year ago, and comparable sales increased 4.2 percent. Comparable sales for the U.S. business increased 5.1 percent for the fourth quarter and 4.1 percent for the fiscal year.

“We achieved strong fourth quarter results, delivering comparable sales growth and adjusted earnings per share above our expectations,” commented Robert A. Niblock, Lowe’s chairman, president and CEO. “We leveraged our omni-channel platform, customer experience design capabilities, and project expertise to drive strong holiday performance and capitalize on broad-based project demand throughout the quarter. Our success is a testament to our employees and I’d like to thank them for their dedication and purposeful commitment to serving the evolving needs of customers

“We’ve entered 2017 well-positioned to capitalize on a favorable macroeconomic backdrop for home improvement by continuing to execute on our strategies to expand customer reach and develop capabilities to anticipate and support their needs. We remain committed to making productivity a core strength and investing in future capabilities that will add the most value for customers. We have the vision, the drive, the plan, and the leadership team to deliver long-term value for customer and shareholders,” Niblock added.

Delivering on its commitment to return excess cash to shareholders, the company repurchased $551 million of stock under its share repurchase program and paid $306 million in dividends in the fourth quarter. For the fiscal year, the company repurchased $3.5 billion of stock under its share repurchase program and paid $1.1 billion in dividends.

Lowe’s operates 2,129 home improvement and hardware stores in the United States, Canada and Mexico representing 213.4 million square feet of retail selling space.

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