CHARLOTTE, N.C. – Lowe's Cos. (LOW), which operates the nation's second biggest home improvement chain, said Monday its earnings rose 15.5 percent in third quarter on a 16.2 percent increase in sales.
Lowe's executives said they were confident about future earnings growth, citing a robust national housing market and a rebound in employment.
Lowe's, which trails only Home Depot Inc. (HD) in the home improvement business, said it earned $522 million, or 66 cents a share, in the three months ended Oct. 29, surpassing Wall Street's expectations by a penny a share. It earned $452 million, or 56 cents a share, a year earlier.
Sales for the third quarter were $9.1 billion, up from $7.8 billion in the third quarter of 2003. Comparable store sales — a measure of sales in stores open at least one year — increased 5.2 percent for the quarter.
"A 5.2 percent increase in comparable store sales on top of the 12.2 percent increase in last year's third quarter represents the best two-year performance for Lowe's in nearly a decade," said Lowe's president Robert Niblock.
For the first nine months of 2004, net earnings grew 14 percent to $1.68 billion, or $2.11 a share, up from $1.47 billion, or $1.84 a share, a year earlier. Sales increased 18.3 percent to $27.9 billion for the first nine months from $23.6 billion a year ago. Comparable store sales increased 6.6 percent.
Lowe's executives said they were confident about the fourth quarter and beyond.
"Continued signs of a robust housing market, improving employment and strong demographic trends provide a foundation for our optimism for the future," Robert Tillman, chairman and chief executive, said in a statement.
Looking ahead, the Mooresville, N.C.-based retailer said it expects earnings of 58 to 60 cents per share in the fourth quarter. Analysts surveyed by Thomson First Call expected 60 cents a share in the fourth quarter. The company expects to open 56 stores in the fourth quarter.
During the quarter, Lowe's opened 35 new stores. Lowe's now operates 1,031 stores in 45 states.
Lowe's shares were down $1.25, or 2.1 percent, to $59 a share on the New York Stock Exchange (search).