LOWE'S REPORTS FIRST QUARTER 2024 SALES AND EARNINGS RESULTS
— Comparable Sales Decreased 4.1%; Diluted EPS of
— Affirms Full Year 2024 Outlook —
Total sales for the quarter were
"We are pleased with our start to spring, driven by strong execution and enhanced customer service," said
As of
Capital Allocation
The company continues to execute a disciplined capital allocation program to generate long-term, sustainable shareholder value. During the quarter, the company repurchased approximately 3.0 million shares for
1 |
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 reconciliations between the Company's GAAP and non-GAAP financial results. |
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Lowe's Business Outlook |
The company is affirming its outlook for full year 2024.
Full Year 2024 Outlook
- Total sales of
$84 to$85 billion - Comparable sales expected to be down -2 to -3% as compared to prior year
- Operating income as a percentage of sales (operating margin) of 12.6% to 12.7%
- Interest expense of approximately
$1.4 billion - Effective income tax rate of approximately 25%
- Diluted earnings per share of approximately
$12.00 to$12.30 - Capital expenditures of approximately
$2 billion
A conference call to discuss first quarter 2024 operating results is scheduled for today,
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Disclosure Regarding Forward-Looking Statements |
This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements including words such as "believe", "expect", "anticipate", "plan", "desire", "project", "estimate", "intend", "will", "should", "could", "would", "may", "strategy", "potential", "opportunity", "outlook", "scenario", "guidance", and similar expressions are forward-looking statements. Forward-looking statements involve, among other things, expectations, projections, and assumptions about future financial and operating results, objectives (including objectives related to environmental and social matters), business outlook, priorities, sales growth, shareholder value, capital expenditures, cash flows, the housing market, the home improvement industry, demand for products and services including customer acceptance of new offerings and initiatives, macroeconomic conditions and consumer spending, share repurchases, and
A wide variety of potential risks, uncertainties, and other factors could materially affect our ability to achieve the results either expressed or implied by these forward-looking statements including, but not limited to, changes in general economic conditions, such as volatility and/or lack of liquidity from time to time in
Investors and others should carefully consider the foregoing factors and other uncertainties, risks and potential events including, but not limited to, those described in "Item 1A - Risk Factors" in our most recent Annual Report on Form 10-K and as may be updated from time to time in Item 1A in our quarterly reports on Form 10-Q or other subsequent filings with the
LOW-IR
Contacts: |
Shareholder/Analyst Inquiries: |
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Media Inquiries: |
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704-775-3856 |
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Consolidated Statements of Current Earnings and Accumulated Deficit (Unaudited) In Millions, Except Per Share and Percentage Data |
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Three Months Ended |
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Current Earnings |
Amount |
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% Sales |
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Amount |
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% Sales |
Net sales |
$ 21,364 |
|
100.00 |
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$ 22,347 |
|
100.00 |
Cost of sales |
14,274 |
|
66.81 |
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14,820 |
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66.32 |
Gross margin |
7,090 |
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33.19 |
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7,527 |
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33.68 |
Expenses: |
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Selling, general and administrative |
4,009 |
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18.77 |
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3,824 |
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17.12 |
Depreciation and amortization |
428 |
|
2.00 |
|
415 |
|
1.85 |
Operating income |
2,653 |
|
12.42 |
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3,288 |
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14.71 |
Interest – net |
352 |
|
1.65 |
|
349 |
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1.56 |
Pre-tax earnings |
2,301 |
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10.77 |
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2,939 |
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13.15 |
Income tax provision |
546 |
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2.56 |
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679 |
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3.04 |
Net earnings |
$ 1,755 |
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8.21 |
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$ 2,260 |
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10.11 |
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Weighted average common shares outstanding – basic |
571 |
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596 |
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Basic earnings per common share (1) |
$ 3.06 |
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$ 3.78 |
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Weighted average common shares outstanding – diluted |
572 |
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597 |
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Diluted earnings per common share (1) |
$ 3.06 |
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$ 3.77 |
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Cash dividends per share |
$ 1.10 |
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$ 1.05 |
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Accumulated Deficit |
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Balance at beginning of period |
$ (15,637) |
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$ (14,862) |
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Net earnings |
1,755 |
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2,260 |
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Cash dividends declared |
(629) |
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(624) |
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Share repurchases |
(677) |
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(2,084) |
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Balance at end of period |
$ (15,188) |
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$ (15,310) |
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(1) |
Under the two-class method, earnings per share is calculated using net earnings allocable to common shares, which is derived by reducing net earnings by the earnings allocable to participating securities. Net earnings allocable to common shares used in the basic and diluted earnings per share calculation were |
Consolidated Statements of Comprehensive Income (Unaudited) In Millions, Except Percentage Data |
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Three Months Ended |
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Amount |
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% Sales |
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Amount |
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% Sales |
Net earnings |
$ 1,755 |
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8.21 |
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$ 2,260 |
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10.11 |
Cash flow hedges – net of tax |
(3) |
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(0.02) |
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(4) |
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(0.02) |
Other |
(1) |
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— |
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1 |
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0.01 |
Other comprehensive loss |
(4) |
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(0.02) |
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(3) |
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(0.01) |
Comprehensive income |
$ 1,751 |
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8.19 |
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$ 2,257 |
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10.10 |
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Consolidated Balance Sheets (Unaudited) In Millions, Except Par Value Data |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ 3,237 |
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$ 2,950 |
Short-term investments |
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264 |
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423 |
Merchandise inventory – net |
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18,224 |
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19,522 |
Other current assets |
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1,025 |
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1,023 |
Total current assets |
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22,750 |
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23,918 |
Property, less accumulated depreciation |
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17,531 |
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17,402 |
Operating lease right-of-use assets |
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3,829 |
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3,504 |
Long-term investments |
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306 |
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103 |
Deferred income taxes – net |
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115 |
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150 |
Other assets |
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834 |
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840 |
Total assets |
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$ 45,365 |
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$ 45,917 |
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Liabilities and shareholders' deficit |
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Current liabilities: |
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Short-term borrowings |
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$ — |
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$ 72 |
Current maturities of long-term debt |
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1,294 |
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589 |
Current operating lease liabilities |
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552 |
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525 |
Accounts payable |
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11,737 |
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11,885 |
Accrued compensation and employee benefits |
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870 |
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766 |
Deferred revenue |
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1,409 |
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1,645 |
Other current liabilities |
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3,644 |
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3,728 |
Total current liabilities |
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19,506 |
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19,210 |
Long-term debt, excluding current maturities |
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34,622 |
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35,863 |
Noncurrent operating lease liabilities |
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3,759 |
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3,479 |
Deferred revenue – |
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1,225 |
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1,206 |
Other liabilities |
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859 |
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869 |
Total liabilities |
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59,971 |
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60,627 |
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Shareholders' deficit: |
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Preferred stock, |
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— |
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— |
Common stock, |
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286 |
|
296 |
Accumulated deficit |
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(15,188) |
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(15,310) |
Accumulated other comprehensive income |
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296 |
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304 |
Total shareholders' deficit |
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(14,606) |
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(14,710) |
Total liabilities and shareholders' deficit |
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$ 45,365 |
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$ 45,917 |
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Consolidated Statements of Cash Flows (Unaudited) In Millions |
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Three Months Ended |
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Cash flows from operating activities: |
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Net earnings |
$ 1,755 |
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$ 2,260 |
Adjustments to reconcile net earnings to net cash provided by operating activities: |
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Depreciation and amortization |
486 |
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465 |
Noncash lease expense |
131 |
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108 |
Deferred income taxes |
135 |
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102 |
(Gain)/loss on property and other assets – net |
(7) |
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11 |
Gain on sale of business |
— |
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(67) |
Share-based payment expense |
55 |
|
59 |
Changes in operating assets and liabilities: |
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Merchandise inventory – net |
(1,330) |
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(990) |
Other operating assets |
(86) |
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157 |
Accounts payable |
3,033 |
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1,361 |
Other operating liabilities |
90 |
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(1,360) |
Net cash provided by operating activities |
4,262 |
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2,106 |
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Cash flows from investing activities: |
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Purchases of investments |
(277) |
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(450) |
Proceeds from sale/maturity of investments |
266 |
|
412 |
Capital expenditures |
(382) |
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(380) |
Proceeds from sale of property and other long-term assets |
15 |
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8 |
Proceeds from sale of business |
— |
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123 |
Other – net |
— |
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(17) |
Net cash used in investing activities |
(378) |
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(304) |
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Cash flows from financing activities: |
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Net change in commercial paper |
— |
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(427) |
Net proceeds from issuance of debt |
— |
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2,983 |
Repayment of debt |
(22) |
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(22) |
Proceeds from issuance of common stock under share-based payment plans |
15 |
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5 |
Cash dividend payments |
(633) |
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(633) |
Repurchases of common stock |
(923) |
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(2,106) |
Other – net |
(5) |
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— |
Net cash used in financing activities |
(1,568) |
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(200) |
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Net increase in cash and cash equivalents |
2,316 |
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1,602 |
Cash and cash equivalents, beginning of period |
921 |
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1,348 |
Cash and cash equivalents, end of period |
$ 3,237 |
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$ 2,950 |
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Non-GAAP Financial Measure Reconciliation (Unaudited)
To provide additional transparency, the Company has presented a comparison to the non-GAAP financial measure of adjusted diluted earnings per share for the three months ended
Fiscal 2023 Impacts
During fiscal 2023, the Company recognized financial impacts from the following, not contemplated in the Company's Business Outlook for fiscal 2023:
- In the first quarter of fiscal 2023, the Company recognized pre-tax income of
$63 million consisting of a realized gain on the contingent consideration and adjustments to the selling price associated with the fiscal 2022 sale of the Canadian retail business (Canadian retail business transaction).
Adjusted diluted earnings per share should not be considered an alternative to, or more meaningful indicator of, the Company's diluted earnings per share as prepared in accordance with GAAP. The Company's methods of determining non-GAAP financial measures may differ from the method used by other companies and may not be comparable.
A reconciliation between the Company's GAAP and non-GAAP financial results is shown below and available on the Company's website at ir.lowes.com.
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Three Months Ended |
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Pre-Tax |
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Tax1 |
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Net Earnings |
Diluted earnings per share, as reported |
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$ 3.77 |
Non-GAAP adjustments – per share impacts |
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Canadian retail business transaction |
(0.10) |
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— |
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(0.10) |
Adjusted diluted earnings per share |
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$ 3.67 |
1 Represents the corresponding tax benefit or expense specifically related to the item excluded from adjusted diluted earnings per share. |
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