Lowe's Q2 Net Jumps 26 Percent on Strong Sales
MOORESVILLE, N.C.-With both total and same-store sales surging, Lowe's logged a second-quarter increase of 26 percent in net income, to $941 million.
The company's top line got its drive from the upward trend in home improvement, according to Robert Niblock, chairman, president and CEO. Net sales were up 10.3 percent to $15.7 billion, including an increase of 9.6 percent in same-store sales.
"Home-improvement demand was strong during the quarter (which ended on Aug. 2), and we capitalized on it with improving execution," Niblock said. "We drove a healthy balance of ticket and transaction growth, and delivered solid performance across all product categories."
The improvement in average ticket helped to boost gross margin by 42 basis points, to 34.4 percent. Selling, general and administrative expenses rose 7.6 percent in dollars but decreased 53 basis points as a percentage of sales, to 21.7 percent.
Lowe's also said it now expects total fiscal-year sales to increase 5 percent, and same-store sales are now projected for a 4.5 percent gain.
In a separate statement, Lowe's said its acquisition of the majority of Orchard Supply Hardware's assets has received the approval of the U.S. Bankruptcy Court of the District of Delaware. The purchase gives Lowe's 72 Orchard stores for about $205 million in cash, and once the purchase is finalized, it will enable Lowe's to expand its presence in California.