Form 10-K: Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Press release·03/24/2025 21:30:39

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Lowe’s Companies, Inc. (LOW) filed its annual report for the fiscal year ended January 31, 2025. The company reported net sales of $93.66 billion, a 4.1% increase from the prior year. Net earnings were $4.34 billion, a 10.1% increase from the prior year. The company’s diluted earnings per share (EPS) were $5.14, a 10.2% increase from the prior year. Lowe’s operating cash flow was $6.45 billion, a 14.1% increase from the prior year. The company’s total assets were $64.45 billion, and its total liabilities were $44.45 billion. Lowe’s has a market capitalization of $136.4 billion and has 559.7 million shares outstanding. The company’s financial performance was driven by strong sales growth in its home improvement business, as well as cost savings initiatives and investments in e-commerce and digital capabilities.

Lowe’s Delivers Solid Financial Performance Amid Challenging Market Conditions

Lowe’s, the home improvement retail giant, has reported its financial results for the fiscal year 2024, showcasing a mixed performance amidst a challenging macroeconomic environment. While the company faced headwinds from factors like ongoing inflation and higher interest rates, it continued to execute its strategic initiatives and deliver value to shareholders.

Financial Highlights

In fiscal 2024, Lowe’s reported net sales of $83.7 billion, a decrease of 3.1% from the previous year. This decline was primarily driven by a 2.7% decrease in comparable sales, which consisted of a 3.0% drop in comparable customer transactions and a 0.3% increase in comparable average ticket.

Despite the lower sales, Lowe’s managed to maintain a strong gross margin of 33.32%, a slight decrease of 7 basis points compared to fiscal 2023. The company’s selling, general, and administrative (SG&A) expenses, however, deleveraged by 72 basis points as a percentage of sales, primarily due to higher employee compensation and benefits costs.

Net earnings for fiscal 2024 decreased 10.0% to $7.0 billion, and diluted earnings per share declined 7.4% to $12.23. Adjusting for the impact of the fiscal 2022 sale of the Canadian retail business, the company’s adjusted diluted earnings per share decreased 8.4% to $11.99.

Operational Highlights

During the fiscal year, Lowe’s saw strength in its Building Materials category, which experienced comparable sales increases. Additionally, four other product categories – Hardware, Rough Plumbing, Appliances, and Millwork – performed above the company average. This performance was driven by strong demand from the company’s Pro customers, offsetting the impact of lower DIY discretionary demand, particularly in bigger-ticket interior projects.

Lowe’s continued to focus on enhancing its omnichannel capabilities, with a strong online performance and improvements in same-day delivery options and the Buy Online Pickup in Store experience. These initiatives have resonated with the company’s customers and contributed to its overall performance.

Shareholder Returns and Capital Allocation

Lowe’s remained committed to returning excess cash to shareholders. During fiscal 2024, the company repurchased $3.9 billion of common stock and paid $2.6 billion in dividends. As of January 31, 2025, Lowe’s had $10.8 billion remaining under its share repurchase program with no expiration date.

The company’s cash flows from operating activities were strong, reaching $9.6 billion in fiscal 2024, with $1.9 billion used for capital expenditures. Lowe’s continued to invest in its strategic initiatives, including enhancing its ability to serve customers, improving existing stores, and supporting expansion plans.

Outlook and Challenges

Looking ahead, Lowe’s remains focused on delivering strong operating performance while making the necessary long-term investments for growth. The company believes that the core demand drivers of its business, such as disposable personal income, home price appreciation, and the age of the housing stock, remain supportive of long-term market demand.

However, the company also acknowledges the broader market uncertainties, including the potential impact of tariffs, tax policy changes, and the overall geopolitical environment. Lowe’s is committed to navigating these challenges by driving productivity, managing costs, and executing its updated Total Home strategy to drive sustainable, long-term shareholder value.

Strengths and Weaknesses

Strengths:

Strong brand recognition and market position in the home improvement industry
Diversified product portfolio catering to both DIY and Pro customers
Ongoing investments in omnichannel capabilities and customer experience
Robust cash flow generation and commitment to shareholder returns

Weaknesses:

Sensitivity to macroeconomic factors, such as inflation and interest rates, impacting consumer spending
Potential challenges in maintaining profitability amid rising costs and competitive pressures
Reliance on the housing market and home improvement trends for growth

Conclusion

Lowe’s has demonstrated its resilience in the face of a challenging market environment, leveraging its strengths to deliver solid financial performance. The company’s focus on strategic initiatives, such as enhancing its omnichannel capabilities and catering to the Pro customer segment, has helped offset the impact of lower DIY discretionary demand.

While the company faces ongoing macroeconomic headwinds, Lowe’s remains committed to driving long-term shareholder value through prudent capital allocation, cost management, and continued investment in its business. As the home improvement market evolves, Lowe’s is well-positioned to capitalize on the industry’s growth opportunities and navigate the challenges ahead.