Lowe's Companies, Inc. (LOW): history, ownership, mission, how it works & makes money

A Brief History of Lowe's Companies, Inc.

Company Overview

Lowe's Companies, Inc. is a leading home improvement retailer in the United States, founded in 1946. The company operates a chain of retail stores offering a wide range of products for home improvement, repair, and maintenance. As of 2024, Lowe's continues to serve both DIY customers and professional contractors.

Financial Performance (2024)

As of the second quarter of fiscal 2024, Lowe's reported the following financial metrics:

Market Position and Strategy

Lowe's operates 1,746 stores across the United States as of August 2024, with total sales floor square footage of approximately 195 million. The company focuses on enhancing its omnichannel capabilities, improving customer experience, and expanding its product offerings to cater to both DIY and professional customers.

Recent Developments

In the second quarter of 2024, Lowe's experienced a decline in comparable sales of 5.1%, primarily due to a 5.9% drop in customer transactions. The company has attributed this decline to ongoing economic pressures and unfavorable weather conditions impacting seasonal product sales. However, Lowe's reports strong demand in building materials and appliances, indicating resilience in certain product categories.

Balance Sheet Snapshot

As of August 2, 2024, Lowe's financial position includes:

Return on Investment Metrics

For the period ending August 2, 2024, Lowe's reported:

Conclusion

Lowe's remains a significant player in the home improvement retail sector, leveraging its extensive store network and strategic initiatives to navigate market challenges and capitalize on growth opportunities.

A Who Owns Lowe's Companies, Inc. (LOW)

Major Shareholders

As of 2024, the ownership structure of Lowe's Companies, Inc. (LOW) is characterized by a mix of institutional and individual investors. Here are the top major shareholders:

Insider Ownership

Insider ownership at Lowe's comprises the company's executives and board members. The following details the insider ownership as of 2024:

Stock Performance

As of August 2, 2024, Lowe's Companies, Inc. has demonstrated notable financial metrics:

Institutional Ownership Trends

Over the past year, institutional ownership of Lowe's has shown a slight increase, reflecting confidence in the company's operational strategies and market position. As of August 2024, approximately 75% of shares are held by institutional investors, compared to 72% in August 2023.

Recent Shareholder Actions

In the first half of 2024, Lowe's repurchased approximately 7.5 million shares at an average price of $230.91, totaling around $1.76 billion. This is part of the company's ongoing strategy to return value to shareholders.

Dividend Information

Lowe's has maintained a consistent dividend policy, with the following details:

The consistent dividend payments and share repurchase activities reflect Lowe's commitment to returning value to its shareholders while maintaining strong operational performance amidst market fluctuations.

Lowe's Companies, Inc. (LOW) Mission Statement

Company Overview

Lowe's Companies, Inc. operates as a home improvement retailer in the United States and Canada. As of August 2, 2024, the company had 1,746 stores with a sales floor area of 195 million square feet, offering a wide range of products for home improvement, including appliances, building materials, and lawn and garden supplies.

Mission Statement

Lowe's mission is to provide customers with the best possible home improvement experience, which they achieve through a commitment to operational excellence, customer service, and a wide selection of products. They aim to improve the lives of their customers by helping them create a better home.

Financial Performance

For the second quarter of fiscal 2024, Lowe's reported net sales of $23.6 billion, a decrease of 5.5% compared to the same quarter in the previous year. This decline was driven by a 5.9% decrease in comparable customer transactions, partially offset by a 0.8% increase in comparable average ticket size.

Operational Metrics

Lowe's continues to focus on enhancing operational productivity while adapting to changing market conditions. Key operational metrics include:

Commitment to Customers

Lowe's commitment to customer satisfaction is reflected in its strategic initiatives aimed at improving the shopping experience. Investments in technology and innovation are central to their operational strategy, which is designed to enhance service delivery and product availability across all channels.

Community Engagement

Lowe's is also dedicated to community engagement and sustainability, reinforcing its mission to support the communities it serves. The company engages in various philanthropic efforts, including disaster relief and community development projects.

Conclusion

As of 2024, Lowe's mission statement and strategic focus underline their commitment to customer satisfaction, operational excellence, and community engagement, positioning them for continued growth in the home improvement industry.

How Lowe's Companies, Inc. (LOW) Works

Financial Performance Overview

Lowe's Companies, Inc. reported net sales of $23.6 billion for the second quarter of 2024, a decrease of 5.5% from $25.0 billion in the same period of 2023. For the first six months of 2024, net sales totaled $45.0 billion, reflecting a 5.0% decline compared to $47.3 billion in the prior year.

Sales and Customer Transactions

Comparable sales for Q2 2024 decreased by 5.1%, driven by a 5.9% decline in customer transactions, while the average ticket size increased by 0.8% to $102.71. For the first half of 2024, comparable sales also declined by 4.6%.

Gross Margin and Operating Expenses

Gross margin as a percentage of sales decreased by 19 basis points in Q2 2024 due to increased supply chain costs, with a total gross margin of 34.5%. Selling, general and administrative (SG&A) expenses also increased, deleveraging by 69 basis points as a percentage of sales.

Return on Invested Capital

Lowe's reported a return on invested capital (ROIC) of 30.9% for the period ending August 2, 2024, compared to 27.8% in the previous year.

Cash Flow and Liquidity

Cash flows provided by operating activities for the first six months of 2024 were $7.4 billion, an increase from $6.0 billion in the same period last year. Capital expenditures were $808 million, with guidance for fiscal 2024 set at approximately $2.0 billion.

Shareholder Returns

During the three months ended August 2, 2024, Lowe's repurchased 4.4 million shares at a cost of $1.0 billion. The company continues to return capital to shareholders through dividends, declaring $1.15 per share in Q2 2024.

Operational Metrics

As of August 2, 2024, Lowe's operated 1,746 stores with a total sales floor area of 195 million square feet. The average store size was approximately 112,000 square feet.

Debt and Financial Position

Lowe's reported total liabilities of $58.7 billion as of August 2, 2024, with total shareholders' deficit at $13.8 billion. The company maintains access to capital markets with $4.0 billion in undrawn capacity on revolving credit facilities.

How Lowe's Companies, Inc. (LOW) Makes Money

Revenue Streams

Lowe's Companies, Inc. generates revenue primarily through the sale of home improvement products and services. The company reported net sales of $23.6 billion for Q2 2024, a decline of 5.5% compared to $24.96 billion in Q2 2023. For the first six months of 2024, net sales totaled $44.95 billion, down from $47.30 billion in the same period of 2023.

Product Categories

The company's sales are disaggregated into several product categories. For Q2 2024, the revenue distribution was as follows:

Cost Structure

Lowe's gross margin for Q2 2024 was 33.47%, compared to 33.66% in Q2 2023. The decrease is attributed to higher supply chain costs and a decline in credit revenue. Operating income for Q2 2024 was recorded at $3.45 billion, reflecting a margin of 14.61%.

Capital Expenditures and Investments

For the first six months of 2024, Lowe's invested approximately $808 million in capital expenditures, compared to $765 million in the same period of 2023. The company anticipates capital expenditures of approximately $2.0 billion for the fiscal year 2024.

Debt and Interest Management

Lowe's maintains a significant amount of debt, with long-term debt reported at $34.66 billion as of August 2, 2024. The net interest expense for Q2 2024 was $317 million, a slight decrease from $341 million in Q2 2023.

Shareholder Returns

Lowe's continues to return value to shareholders through dividends and share repurchases. In Q2 2024, the company declared cash dividends of $1.15 per share, totaling $654 million. Additionally, share repurchases amounted to $1.0 billion during the same period.

Future Outlook

Looking forward, Lowe's is focused on improving its omnichannel fulfillment capabilities and enhancing customer experiences. The company remains optimistic about long-term growth driven by factors such as home price appreciation and increasing disposable income.