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Lowe’s Earnings Rise 42 Percent

August 19, 2002

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WILKESBORO, N.C. (AP) _ Lowe’s Cos., the nation’s second largest home-improvement retail chain, reported a 42 increase in its second-quarter earnings Monday, helped in large part by its expansion into big U.S. cities.

The Wilkesboro, N.C.-based company’s profit for the quarter was $467.1 million, or 59 cents a share. In the same quarter last year, Lowe’s earned $329.1 million, or 42 cents a share.

Wall Street analysts had expected Lowe’s to earn 54 cents a share, according to research firm Thomson First Call.

Shares of Lowe’s rose $3.87 to $40.66 in Monday morning trading on the New York Stock Exchange.

Sales were $7.5 billion, up 22 percent from $6.1 billion. And sales in stores that have been open at least a year rose 6.8 percent, up significantly from the 1.7 percent increase in same-store sales in the year-ago period.

``During the quarter, we experienced strong performance across all geographic regions and all product categories,″ said Robert Tillman, Lowe’s chairman and chief executive officer. ``While mixed economic signals make it difficult to develop a comfort level about the overall direction of the economy . . . the home improvement consumer remains resilient and Lowe’s is positioned to capitalize on a growing home improvement market.″

The company also said it would begin accounting for stock options as an expense in its fiscal year beginning Feb. 1, 2003.

``Expensing stock options will increase investor confidence as well as provide greater visibility into the financial condition of corporate America,″ Tillman said.

During the quarter, Lowe’s opened 22 new stores including one relocation. Lowe’s operates 806 stores in 43 states.

For the six months ended Aug. 2, net earnings were $813 million, or $1.02 per share, compared with $554 million, or 71 cents per share, in the first half of last year. Sales increased a little more than 22 percent for the six months to $13.9 billion.

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