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Lowe's (LOW) |
HenryTo
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 Posted: Fri Feb 20, 2009 9:22 pm Post subject: Lowe's (LOW) |
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Morningstar on LOW's latest earnings:
| Quote: | | Lowe's (LOW) reported fourth-quarter results that were slightly below our estimates and reflect the very challenging consumer spending environment and its effect on many retailers in the period. In the fourth quarter, total sales decreased 3.8% year over year, to $9.98 billion, as the 9.9% decrease in same-store sales more than offset revenue from new stores. Operating income decreased 53% year over year, to $329 million (3.3% of sales), because of higher promotional activity and a moderate increase in selling and administrative expenses. While our long-term outlook is unchanged, we believe the business faces a number of challenges over the next several quarters. We remain concerned that Lowe's operations will be pressured by a weak housing market, rising unemployment, and tight credit conditions. We plan to re-evaluate our model assumptions after taking a closer look at the numbers and listening to management's comments on the conference call. For now, we don't anticipate a material change to our fair value estimate. |
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Lowe's (LOW) Replies |
HenryTo
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Location: Los Angeles, California
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| Posted: Mon Aug 17, 2009 11:07 am Post subject: |
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Morningstar's analyst notes on LOW:
| Quote: | | Lowe's LOW second-quarter results confirm our thesis that the retailer, as well as the entire home-improvement industry, continues to be pressured by lackluster consumer spending and the weak domestic housing market. Still, Lowe's gained market share in the quarter, which bolsters our view that its competitive position remains strong. While second-quarter sales results were weaker than we anticipated, earnings results through the first six months of 2009 are tracking in line with our full-year expectations. We believe profitability will benefit from disciplined expense control. We plan to re-evaluate our model assumptions after taking a closer look at the numbers and listening to management's comments on the conference call. For now, we don't anticipate a material change to our fair value estimate. Total quarterly sales decreased 4.6% year over year, to $13.8 billion, reflecting a 9.5% decrease in same-store sales, partially offset by revenue from new stores. We believe same-store sales were hurt by unseasonable weather in certain markets, as well as fiscal stimulus-aided results in the year-ago quarter. Despite weak same-store sales, Lowe's was able to gain market share, a trend we expect to continue in any retail environment. Lowe's was also able to improve its gross margin to 34.8% from 34.3% in the year-ago quarter. We think this was the result of prudent inventory management and upgraded sourcing and distribution systems. However, because fixed costs (such as salaries and rent) increased at a quicker pace than sales, operating income decreased 17.5% year over year, to $1.29 billion (9.3% of sales) from $1.57 billion (10.8% of sales) in the year-ago period. While we see some encouraging macroeconomic trends--single-family housing starts have increased and existing home inventories are being absorbed in many markets--many of these variables remain near historical lows. Consequently, we expect the home-improvement industry to continue to struggle during the next few quarters. Given this outlook, we estimate that Lowe's will slow expansion to about 40 new stores in 2010. Still, we remain optimistic about Lowe's long-term growth prospects and believe the firm is well positioned to emerge from this cyclical downturn as a dominant force in the home-improvement market. |
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rffrydr
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Location: Sunny California
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rffrydr
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| Posted: Mon May 18, 2009 11:19 am Post subject: |
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Spring is always gonna be "good" for LOWES--the "woman's Home Depot". No longer trading up in RE there is some refocus on not only making do with what they've got but planning on keeping what they have got--a new twist on the remodel. Nothing is obvious.
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Today is the Tomorrow you worried about Yesterday! |
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HenryTo
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Posts: 11740
Location: Los Angeles, California
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| Posted: Mon May 18, 2009 10:10 am Post subject: |
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Morningstar on Lowe's 1Q 2009 earnings:
| Quote: | | Lowe's LOW reported first-quarter results that were slightly better than our estimates, perhaps reflecting a deceleration in the decline of home prices and other housing-related expenditures. Still, we expect consumer spending to remain weak for some time, particularly on major home-improvement projects. In the first quarter, total sales decreased 1.5% year over year, to $11.8 billion, as the 6.6% decrease in same-store sales more than offset revenue from new stores. Operating income decreased 20% year over year, to $838 million (7.1% of sales) from $1,048 million (8.7% of sales), because of payroll and fixed cost deleverage. While our long-term outlook is unchanged, we believe the business faces a number of challenges over the next several quarters. We remain concerned that Lowe's operations will be pressured by a weak housing market, rising unemployment, and tight credit conditions. We plan to re-evaluate our model assumptions after taking a closer look at the numbers and listening to management's comments on the conference call. For now, we don't anticipate a material change to our fair value estimate. |
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