Lowe’s reported a net loss in a fourth quarter hit by pre-tax charges as the home improvement retailer progressed with its business transformation initiatives.
The company reported a net loss of $824 million and diluted loss per share of $1.03 for the fourth quarter ended February 1, 2019. The quarter included pre-tax charges of $1.6 billion. The results compared to net earnings of $554 million and diluted earnings per share of $0.67 in the fourth quarter of 2017.
Sales for the fourth quarter were $15.6 billion compared to $15.5 billion in the fourth quarter of 2017, and comparable sales increased 1.7%. Comparable sales for the U.S. home improvement business increased 2.4% for the fourth quarter.
The $1.6 billion in pre-tax charges recognized in the fourth quarter included the following: $952 million related to a non-cash goodwill impairment charge associated with the company’s Canadian operations; $208 million of charges related to the previously announced closing of all Orchard Supply Hardware locations; $150 million of charges related to the previously announced closing of certain underperforming stores in the U.S. and Canada as well as other locations in Canada; $222 million related to asset impairment charges associated with the previously announced exit of retail operations in Mexico; $32 million associated with the wind down of Iris Smart Home; $13 million in severance obligations associated with the elimination of the Project Specialists Interiors position.
“Overall, we are pleased with the progress we are making in our business,” said Marvin Ellison, Lowe’s president and CEO. “Most of the intense work over the past six months to transform our company has been in preparation for an improved spring season and fiscal 2019. Therefore, we are encouraged by an improved comparable sales progression through the fourth quarter, culminating in U.S. home improvement comp growth of 5.8% in January. Although we have remaining work to do, we are pleased with the results we are seeing in early spring categories, which is evidence that we are focused on the right actions at this stage of our transformation.”