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Lowe's has strong fourth quarter

Building same-store sales at a rapid pace, while growing margins and paring costs, Lowe's Companies Inc. drove fourth-quarter profits up more than a fourth (27.6 percent), to $1.9 billion from $1.5 billion last year.

Sales at the nation's second-largest home improvement retailer grew by 18.1 percent, to $30.8 billion from $26.1 billion, benefiting from a move into larger metropolitan markets. The critical measure of same-store sales improved by 7.3 percent for the closing quarter, and by 6.7 percent for all of last year.

Lifting profits, in addition to the stronger sales, average gross margin improved by 20 basis points, or two-tenths of a percentage point, to 32 percent from 31.8 percent in the year-ago period. At the same time, costs were whittled down by 10 basis points, or one-tenth of a percentage point, to 19 percent from 19.1 percent last year.

In another big cost savings, the retailer kept inventories under tight control, with stockpiles rising more slowly than sales. Inventories increased by 15.5 percent, to $4.6 billion from $4 billion, substantially beneath the 20.1 percent rate of sales growth.

Running on a fast track for all of last year, Lowe's pushed profits up by 27.6 percent, to $1.9 billion from $1.5 billion. Sales advanced by 18.1 percent, to $30.8 billion from $26.1 billion.

Lowe's said it plans to open 29 stores in the first quarter, pushing total sales up by 18 to 19 percent, with same-store sales growing at a pace of 6 to 7 percent. For all of this year, the retailer said it plans to open about 140 new units.

Lowe's Companies Inc.

Qtr. 1/30 (x000) 2003 2002 % chg
a-Fourth-quarter results include $6 million in after-tax profit from a discontinued operation, compared with $2 million last year.
b-12-month results include $15 million in after-tax profit from a discontinued operation, compared with $12 million a year ago.
Sales $7,252,000 $6,037,000 20.1
Oper. income (EBIT) 943,000 767,000 22.9
Net income 407,000a 319,000a 27.6
Per share (diluted) 0.51 0.40 27.5
Average gross margin 32.0% 31.8% --
SG&A expenses 19.0% 19.1% --
12 months 2003 2002 % chg
Sales 30,838,000 26,112,000 18.1
Oper. income (EBIT) 4,064,000 3,272,000 24.2
Net income 1,877,000b 1,471,000b 27.6
Per share (diluted) 2.34 1.85 26.5
Average gross margin 31.2% 30.4% --
SG&A expenses 18.0% 17.9% --


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