Upcoming AWS Coverage on Lumber Liquidators Holdings Post-Earnings Results
LONDON, UK / ACCESSWIRE / November 28, 2016 / Active Wall St. announces its post-earnings coverage on Lowe's Companies, Inc. (NYSE: LOW). The company reported its third quarter fiscal 2016 (Q3 FY16) earnings on November 16, 2016. The Mooresville, North Carolina-based Company's net sales and adjusted net earnings improved 9.6% and 5.3% y-o-y, respectively, in the reported period. Register with us now for your free membership at: http://www.activewallst.com/register/.
One of Lowe's Cos' competitors within the Home Improvement Stores space, Lumber Liquidators Holdings, Inc. (NYSE: LL), announced on October 31, 2016, financial results for the third quarter ended September 30, 2016. AWS will be initiating a research report on Lumber Liquidators in the coming days.
Today, AWS is promoting its earnings coverage on LOW; touching on LL. Get our free coverage by signing up to:
http://www.activewallst.com/registration-3/?symbol=LOW
http://www.activewallst.com/registration-3/?symbol=LL
Earnings Reviewed
In Q3 FY16, Lowe's reported net sales of $15.74 billion compared to $14.36 billion in Q3 FY15. However, sales number for the reported quarter fell marginally short of market expectations of $15.80 billion. In Q3 FY16, $900 million, or 6.3% of the sales growth, was due to the acquisition of RONA, while approximately 60 basis points of sales growth was due to new stores.
The home improvement retailer reported net earnings of $379 million, or $0.43 per diluted share, in Q3 FY16 compared to $736 million, or $0.80 per diluted share, in the prior year's comparable quarter. Adjusted net earnings for Q3 FY16 came in at $775 million, or $0.88 per diluted share, which were below Wall Street's adjusted earnings expectations of $0.96 per diluted share.
Robert A. Niblock, Lowe's chairman, president and CEO, stated in the earnings release:
"While we have made progress in driving productivity in recent years, we are in the process of evaluating meaningful incremental opportunities to drive shareholder value while continuing to meet customers' needs in an omni-channel environment."
As on October 28, 2016, Lowe's had 2,119 home improvement and hardware stores in the United States, Canada, and Mexico; a total of 212.8 million square feet of retail selling space.
Operating Metrics
During the three months ended October 28, 2016, the company's comparable sales growth was recorded at 2.7%, primarily driven by a 0.5% rise in transactions and a 2.2% growth in average ticket.
In Q3 FY16, Lowe's reported gross margin of $5.41 billion, or 34.35% of net sales, compared to $4.99 billion, or 34.75% of net sales, in the prior year's same quarter. Selling, general, and administrative expenses for the reported period came in at $4.09 billion, or 25.98% of net sales, versus $3.29 billion, or 22.89% of net sales in the previous year's same quarter. Lowe's Q3 FY16 operating results came in below the company's expectations due to slower sales in the first two months of the quarter.
For Q3 FY16, earnings before interest and taxes were 5.97% of net sales, down 328 basis points from prior year's same quarter. Furthermore, adjusted EBIT decreased 35 basis points to 8.9% of net sales in Q3 FY16.
Cash Flow and Balance Sheet
In the nine months ended October 28, 2016, net cash provided by operating activities was $5.27 billion compared to $4.55 billion in the first three quarters of FY15. Additionally, the company's capital expenditures for the first nine months of FY16 stood at $820 million and free cash flow in same period was over $4.4 billion, which was up 20% y-o-y.
As on October 28, 2016, the company had $960 million in cash and cash equivalents compared to a balance of $1.23 billion as on October 30, 2015. The company reported long-term debt of $14.40 billion in its books of accounts as on October 28, 2016, compared to $11.53 billion as on October 30, 2015.
Dividends and Share Repurchases
In a separate press release on November 11, 2016, Lowe's Board of Directors announced a quarterly cash dividend of $0.35 per share on its common stock. The dividend is payable on February 08, 2017, to shareholders of record at the close of business on January 25, 2017.
During Q3 FY16, Lowe's repurchased stock worth $550 million under its share repurchase program and paid dividends amounting to $309 million. Furthermore, the company repurchased shares worth $3.0 billion and paid $815 million in form of dividends during the first nine months ended October 28, 2016.
Earnings Outlook
In its guidance for full year FY16, Lowe's expect total sales to rise by 9% to 10%, which includes a 1.5% increase in sales due to additional 53rd week. The company anticipates comparable sales to grow by 3% to 4% during FY16. Furthermore, the company projects diluted earnings to be approximately $3.52 for the fiscal year ending February 03, 2017.
Stock Performance
At the closing bell, on Friday, November 25, 2016, Lowe's Cos' stock was marginally up by 0.61%, ending the trading session at $72.21. A total volume of 2.71 million shares were traded at the end of the day. In the last month, shares of the company have advanced 7.18%. The stock is trading at a PE ratio of 26.26 and has a dividend yield of 1.94%.
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