Housing Bubble

Lowe's reports record earnings for fourth quarter and fiscal year

February 24, 2003

WILKESBORO, N.C., Feb. 24 /PRNewswire-FirstCall/Lowe's Companies, Inc., the world's second largest home improvement retailer, today reported net earnings of $319.4 million for the quarter ended January 31, 2003, a 46.2 percent increase over the same period a year ago. Diluted earnings per share increased 42.9 percent to $0.40 from $0.28 in the fourth quarter of 2001. For fiscal 2002, net earnings grew 43.8 percent to $1.47 billion and diluted earnings per share increased 42.3 percent to $1.85.

Sales for the quarter increased 16.5 percent to $6.12 billion, up from $5.25 billion in the fourth quarter of 2002. Comparable store sales for the fourth quarter increased by 4.1 percent. Fiscal 2002 sales increased to $26.5 billion, a 19.8 percent increase over fiscal 2001. Comparable store sales increased 5.6 percent for the year.

"In 2002, amidst a backdrop of economic uncertainty, Americans continued to invest in their largest asset, their homes," commented Robert L. Tillman, Lowe's chairman and CEO. "Throughout the year, we continued to experience consistent performance across all regions and all product categories. Focused on providing exceptional customer service, our employees delivered the best year in Lowe's history."

"The year ahead holds challenges, but many signs point to a strong home improvement market. Positioning Lowe's for future growth, I'm confident our employees will continue their consistent execution of the fundamentals with a diligent focus on exceeding customer expectations. Despite the uncertainties that remain in the broader economic and geopolitical environment, I'm optimistic that the home improvement consumer will remain resilient."

During the quarter, Lowe's opened 37 new stores including 6 relocations. For the year, Lowe's opened 123 new stores including 11 relocations. Two older, smaller stores were closed during the year. As of January 31, 2003, Lowe's operated 854 stores in 44 states representing 94.7 million square feet, a 17.4 percent increase over last year.

Last week, FORTUNE, one of the nation's leading business publications, announced its 2003 list of America's Most Admired Companies, ranking Lowe's Companies, Inc. number one in the specialty retailer category.

Lowe's Business Outlook

Fiscal Year 2003 (comparisons to fiscal year 2002)

The company expects to open 130 stores in 2003 reflecting total square footage growth of 15 to 16 percent
Total sales are expected to increase approximately 16 to 17 percent for the year
The company expects to report a comparable store sales increase of approximately 4 to 5 percent
Operating margin (defined as gross margin less SG&A and depreciation) is expected to increase approximately 20 basis points
Store opening costs are expected to be approximately $140 million
Diluted earnings per share of $2.16 to $2.20 are expected for the fiscal year ending January 30, 2004

Source: Lowe's Companies, Inc.