On Friday, Feb. 23, home improvement giant Lowe's
- Total reported sales fell 3.7%, but last year's quarter included an extra week. Adjusting for the extra week, management stated total sales improved 5%, even though same-store sales fell 5.3%.
- Net profit fell 11.5%, but diluted earnings only fell 7%, because the company repurchased shares.
- Management summarized its current challenges in the earnings press release: "Sales continued to be pressured by a slowing housing market, tough comparisons to last year's hurricane recovery and rebuilding efforts and significant deflation in lumber and plywood prices"
- Lowe's is currently projecting fiscal year 2007 diluted earnings of $2.02-$2.09 per share, for year-over-year growth of only a couple of percentage points.
- For comparison purposes, orange archrival Home Depot
(NYSE:HD) posted an even drearier fourth quarter, as did rival Builders FirstSource(NASDAQ:BLDR) today.
(Figures in millions, except per-share data)
Income Statement Highlights
Q4 2006 |
Q4 2005 |
Change |
|
---|---|---|---|
Sales |
$10,406 |
$10,808 |
(3.7%) |
Net Profit |
$613 |
$693 |
(11.5%) |
EPS |
$0.40 |
$0.43 |
(7.0%) |
Diluted Shares |
1,549 |
1,600 |
(3.2%) |
Get back to basics with a look at the income statement.
Margin Checkup
Q4 2006 |
Q4 2005 |
Change* |
|
---|---|---|---|
Gross Margin |
35.4% |
35.0% |
0.4 |
Operating Margin |
9.6% |
10.8% |
(1.2) |
Net Margin |
5.9% |
6.4% |
(0.5) |
Margins are the earnings engine. See how they work.
Balance Sheet Highlights
Assets |
Q4 2006 |
Q4 2005 |
Change |
---|---|---|---|
Cash + ST Invest. |
$796 |
$876 |
(9.1%) |
Inventory |
$7,144 |
$6,635 |
7.7% |
Liabilities |
Q4 2006 |
Q4 2005 |
Change |
---|---|---|---|
Accounts Payable |
$3,524 |
$2,832 |
24.4% |
Long-Term Debt |
$4,325 |
$3,499 |
23.6% |
Learn the ways of the balance sheet.
Cash Flow Highlights
Q4 2006 |
Q4 2005 |
Change |
|
---|---|---|---|
Cash From Ops. |
$4,502 |
$3,842 |
17.2% |
Capital Expenditures |
$3,916 |
$3,379 |
15.9% |
Free Cash Flow |
$586 |
$463 |
26.6% |
Find out why Fools always follow the money.
Related Foolishness:
- Foolish Forecast: Lowe's Lowdown
- Three Retailers to Watch
- Home Depot Needs Repairs
- Home Depot Severs Supply Lines
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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.
Fool contributor Ryan Fuhrmann is long shares of Home Depot but has no financial interest in any other company mentioned. The Fool has an ironclad disclosure policy. Feel free to email him with feedback or to discuss any companies mentioned further.