Lowe's Companies, Inc. (NYSE:LOW) Q3 2015 Earnings Conference Call - Final Transcript
Nov 18, 2015 • 09:00 am ET
Good morning, everyone and welcome to Lowe's Companies Third Quarter 2015 Earnings Conference Call. This call is being recorded. (Operator Instructions) Also, supplemental reference slides are available on Lowe's Investor Relations website within the investor packet. While management will not be speaking directly to the slides, these slides are meant to facilitate your review of the Company's results and to be used as a reference document following the call.
(Forward-Looking Cautionary Statements)
Hosting today's conference will be Mr Robert Niblock, Chairman, President and Chief Executive Officer, Mr Rick Damron, Chief Operating Officer and Mr Bob Hull, Chief Financial Officer. I would now turn the program over to Mr. Niblock for opening remarks. Please go ahead, sir.
Good morning, and thanks for your interest in Lowe's. I'm pleased that we delivered another solid quarter with comparable sales growth of 4.6% or 9.7% on a two-year basis. Our comp growth was balanced with a 2.5% increase in comp transactions and a 2% increase in average ticket. Our US home improvement business achieved 5% comps for the quarter with all 14 regions generating positive comps. Our businesses in Canada and Mexico delivered high-single digit comps in local currency. Our consolidated comp was negatively impacted by foreign currency translation.
We generated positive comps in 12 of 13 product categories, with outdoor power equipment delivering flat comps on top of double-digit comps last year. We had strength in seasonal living as customers took the opportunity to extend the outdoor season driven by warmer and drier weather early in the quarter. Tools and hardware also performed well, as both Pro and DIY customers responded to the improvements, we continue to making our assortment further enhanced by exciting home-center exclusives. And our strong brand and service advantages in appliances continue to drive double-digit comps in the category for the fourth quarter in a row.
Lastly, our Pro business also performed well, as we continue to build deeper relationships with the Pro by enhancing our product and service offering to meet their unique needs. For the quarter, gross margin expanded 26 basis points, and we effectively controlled expenses, delivering 130 basis points of operating margin expansion and earnings per share of $0.80, a 36% increase over last year's third quarter. Delivering our commitment to return excess cash to shareholders in the quarter, we repurchased $750 million of stock under our share repurchase program and paid $260 million in dividends.
We've been working to improve our product and service offering for the Pro customer and differentiating ourselves to better customer experiences that make us the project authority. And we continue to enhance our omni-channel capabilities transforming our brand from a multi-channel offering in-store, digital, in-home and by phone to an omni-channel experience where all of our channels work in concert with one another.
To clarify, this transition is about -- this transformation is about much more than growing our e-commerce business. Our efforts were centered around supporting customers at every step of the home improvement journey and building greater affinity