Lowe's Reports Second Quarter Sales and Earnings Results

MOORESVILLE, N.C., Aug. 17 /PRNewswire-FirstCall/ -- Lowe's Companies, Inc.
(NYSE: LOW), the world's second largest home improvement retailer, today
reported net earnings of $759 million for the quarter ended July 31, 2009, a
19.1 percent decline from the same period a year ago. Diluted earnings per
share declined 19.0 percent to $0.51 from $0.63 in the second quarter of 2008.
For the six months ended July 31, 2009, net earnings declined 20.1 percent to
$1.23 billion while diluted earnings per share declined 19.2 percent to $0.84.

(Logo: http://www.newscom.com/cgi-bin/prnh/20031205/LOWLOGO)

In response to the challenging economic environment, which has resulted in
declining demand for home improvement products, the company has re-evaluated
its future store expansion plans. For 2010, expansion in North America will
be below previously anticipated levels, and new store openings will likely be
in the range of 35 to 45. Given this, the company has evaluated the pipeline
of potential future store sites and made the decision to no longer pursue
several projects. The company's results reflect a pre-tax charge of $48
million for the second quarter primarily related to these projects.

Sales for the quarter declined 4.6 percent to $13.8 billion, down from $14.5
billion in the second quarter of 2008. For the six months ended July 31,
2009, sales declined 3.2 percent to $25.7 billion. Comparable store sales for
the second quarter declined 9.5 percent and declined 8.2 percent in the first
half of 2009.

"Wavering consumer confidence, unseasonable weather in core markets, and
restrained customer spending compared to last year's fiscal stimulus-aided
results led to lower than expected sales in the second quarter," commented
Robert A. Niblock, Lowe's chairman and CEO. "Cautious consumers remain
reluctant to take on discretionary projects until signs of economic
improvement are more evident. Despite weak sales, sound execution combined
with disciplined inventory management and solid expense control led to
reasonable earnings for the quarter, and Lowe's market share gains confirm our
competitive position remains strong.

"There are some indications that a bottoming process in housing and the
broader economy is under way, and we have seen customer traffic levels
stabilize as we benefit from the resurgence of a do-it-yourself home
improvement mindset," Niblock added. "As near-term pressures on the consumer
remain, we enter the back half of the year with a cautious sales outlook but
have the flexibility to react to a quickly changing environment."

During the quarter, Lowe's opened 18 new stores. As of July 31, 2009, Lowe's
operated 1,688 stores in the United States and Canada representing 190.8
million square feet of retail selling space, a 6.8 percent increase over last
year.

A conference call to discuss second quarter 2009 operating results is
scheduled for today (Monday, August 17) at 9:00 am EDT. Please dial
888-817-4020 (international callers dial 706-679-4821) to participate. A
webcast of the call will take place simultaneously and can be accessed by
visiting Lowe's website at www.Lowes.com/investor and clicking on Lowe's
Second Quarter 2009 Earnings Conference Call Webcast. A replay of the call
will be archived on Lowes.com until November 15, 2009.

Lowe's Business Outlook

Third Quarter 2009 (comparisons to third quarter 2008)
-- The company expects to open approximately 11 new stores reflecting
square footage growth of approximately 5 percent
-- Total sales are expected to decline 2 to 5 percent
-- The company expects comparable store sales to decline 6 to 10 percent
-- Earnings before interest and taxes as a percentage of sales (operating
margin) is expected to decline approximately 170 basis points driven
by
payroll, fixed cost and depreciation deleverage
-- Store opening costs are expected to be approximately $11 million
-- Diluted earnings per share of $0.21 to $0.25 are expected

-- Lowe's third quarter ends on October 30, 2009 with operating
results to be publicly released on Monday, November 16, 2009

Fiscal Year 2009 (comparisons to fiscal year 2008)
-- The company expects to open 62 to 66 stores in 2009 reflecting total
square footage growth of approximately 4 percent
-- Total sales are expected to decline approximately 3 percent
-- The company expects comparable store sales to decline 7 to 9 percent
-- Earnings before interest and taxes as a percentage of sales (operating
margin) is expected to decline approximately 130 basis points
-- Store opening costs are expected to be approximately $50 million

-- Diluted earnings per share of $1.13 to $1.21 are expected for the
fiscal
year ending January 29, 2010

Disclosure Regarding Forward-Looking Statements

This news release includes "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995 (the "Act"). Statements
of the company's expectations for sales growth, comparable store sales,
earnings and performance, capital expenditures, store openings, the housing
market, the home improvement industry, demand for services, and any statement
of an assumption underlying any of the foregoing, constitute "forward-looking
statements" under the Act. Although the company believes that the
expectations, opinions, projections, and comments reflected in its
forward-looking statements are reasonable, it can give no assurance that such
statements will prove to be correct. A wide variety of potential risks,
uncertainties, and other factors could materially affect our ability to
achieve the results expressed or implied by our forward-looking statements
including, but not limited to, changes in general economic conditions, such as
rising unemployment, interest rate and currency fluctuations, higher fuel and
other energy costs, slower growth in personal income, changes in consumer
spending, the availability and increasing regulation of consumer credit and
mortgage financing, changes in the rate of housing turnover, inflation or
deflation of commodity prices and other factors which can negatively affect
our customers, as well as our ability to: (i) respond to adverse trends in
the housing industry and the level of repairs, remodeling, and additions to
existing homes, as well as general reduction in commercial building activity;
(ii) secure, develop, and otherwise implement new technologies and processes
designed to enhance our efficiency and competitiveness; (iii) attract, train,
and retain highly-qualified associates; (iv) locate, secure, and successfully
develop new sites for store development particularly in major metropolitan
markets; (v) respond to fluctuations in the prices and availability of
services, supplies, and products; (vi) respond to the growth and impact of
competition; (vii) address legislative and regulatory developments; and (viii)
respond to unanticipated weather conditions that could adversely affect sales.
For more information about these and other risks and uncertainties that we
are exposed to, you should read the "Risk Factors" included in our Annual
Report on Form 10-K to the United States Securities and Exchange Commission
and the description of material changes, if any, in those "Risk Factors"
included in our Quarterly Reports on Form 10-Q.

The forward-looking statements contained in this news release speak only as of
the date of this release and the company does not assume any obligation to
update any such statements.

With fiscal year 2008 sales of $48.2 billion, Lowe's Companies, Inc. is a
FORTUNE(R) 50 company that serves approximately 14 million customers a week at
more than 1,675 home improvement stores in the United States and Canada.
Founded in 1946 and based in Mooresville, N.C., Lowe's is the second-largest
home improvement retailer in the world. For more information, visit Lowes.com.

Lowe's Companies, Inc.
Consolidated Statements of Current and Retained Earnings (Unaudited)
In Millions, Except Per Share Data

Three Months Ended
----------------------
July 31, 2009 August 1, 2008
Current Earnings Amount Percent Amount Percent
---------------- ---------- ------- ---------- -------
Net sales $13,844 100.00 $14,509 100.00

Cost of sales 9,021 65.16 9,527 65.66

Gross margin 4,823 34.84 4,982 34.34

Expenses:

Selling, general and
administrative 3,109 22.45 3,014 20.78

Store opening costs 14 0.10 21 0.14

Depreciation 408 2.95 381 2.63

Interest - net 76 0.55 69 0.47

Total expenses 3,607 26.05 3,485 24.02

Pre-tax earnings 1,216 8.79 1,497 10.32

Income tax provision 457 3.31 559 3.86

Net earnings $759 5.48 $938 6.46

Weighted average common shares
outstanding - basic 1,464 1,455

Basic earnings per common share $0.51 $0.64

Weighted average common shares
outstanding - diluted 1,466 1,470

Diluted earnings per common share $0.51 $0.63

Cash dividends per share $0.090 $0.085

Retained Earnings
----------------- ------- -------
Balance at beginning of period $17,399 $15,835
Net earnings 759 938
Cash dividends (133) (125)
Balance at end of period $18,025 $16,648

Six Months Ended
--------------------
July 31, 2009 August 1, 2008
Current Earnings Amount Percent Amount Percent
---------------- ---------- ------- ---------- -------
Net sales $25,676 100.00 $26,519 100.00

Cost of sales 16,658 64.88 17,371 65.50

Gross margin 9,018 35.12 9,148 34.50

Expenses:

Selling, general and
administrative 6,052 23.56 5,738 21.65

Store opening costs 27 0.11 38 0.14

Depreciation 809 3.15 757 2.85

Interest - net 154 0.60 145 0.55

Total expenses 7,042 27.42 6,678 25.19

Pre-tax earnings 1,976 7.70 2,470 9.31

Income tax provision 741 2.89 925 3.49

Net earnings $1,235 4.81 $1,545 5.82

Weighted average common shares
outstanding - basic 1,463 1,454

Basic earnings per common share $0.84 $1.06

Weighted average common shares
outstanding - diluted 1,465 1,473

Diluted earnings per common share $0.84 $1.04

Cash dividends per share $0.175 $0.165

Retained Earnings
----------------- ------- -------
Balance at beginning of period $17,049 $15,345
Net earnings 1,235 1,545
Cash dividends (259) (242)
Balance at end of period $18,025 $16,648

Lowe's Companies, Inc.
Consolidated Balance Sheets
In Millions, Except Par Value Data

------------- ------------- ----------
(Unaudited) (Unaudited)
July 31, August 1, January 30,
2009 2008 2009
------------- ------------- ----------
Assets

Current assets:
Cash and cash equivalents $1,087 $477 $245
Short-term investments 424 377 416
Merchandise inventory - net 8,189 7,939 8,209
Deferred income taxes - net 177 275 166
Other current assets 216 236 215
--- --- ---

Total current assets 10,093 9,304 9,251

Property, less accumulated
depreciation 22,727 22,066 22,722
Long-term investments 900 798 253
Other assets 462 381 460
--- --- ---

Total assets $34,182 $32,549 $32,686
======= ======= =======

Liabilities and shareholders' equity

Current liabilities:
Short-term borrowings $9 $189 $987
Current maturities of long-term debt 552 31 34
Accounts payable 4,970 4,786 4,109
Accrued compensation and employee
benefits 540 492 434
Self-insurance liabilities 784 736 751
Deferred revenue 716 816 674
Other current liabilities 1,373 1,478 1,033
----- ----- -----

Total current liabilities 8,944 8,528 8,022

Long-term debt, excluding
current maturities 4,515 5,050 5,039
Deferred income taxes - net 564 641 660
Other liabilities 983 824 910
--- --- ---

Total liabilities 15,006 15,043 14,631
------ ------ ------

Shareholders' equity:
Preferred stock - $5
par value, none issued - - -
Common stock - $.50 par
value;
Shares issued and
outstanding
July 31, 2009 1,477
August 1, 2008 1,464
January 30, 2009 1,470 738 732 735
Capital in excess of
par value 367 118 277
Retained earnings 18,025 16,648 17,049
Accumulated other
comprehensive
income (loss) 46 8 (6)
-- - --

Total shareholders' equity 19,176 17,506 18,055
------ ------ ------

Total liabilities and
shareholders' equity $34,182 $32,549 $32,686
======= ======= =======

Lowe's Companies, Inc.
Consolidated Statements of Cash Flows (Unaudited)
In Millions

----------------
Six Months Ended

July 31, 2009 August 1, 2008
------------- --------------
Cash flows from operating activities:
Net earnings $1,235 $1,545
Adjustments to reconcile net
earnings to net cash provided by
operating activities:
Depreciation and amortization 870 816
Deferred income taxes (106) (57)
Loss on property and other assets 73 30
Loss on redemption of long-term debt - 8
Transaction gain from exchange
rate changes (1) -
Share-based payment expense 50 54
Changes in operating assets and
liabilities:
Merchandise inventory - net 32 (328)
Other operating assets 20 52
Accounts payable 858 1,073
Other operating liabilities 685 675
Net cash provided by operating activities 3,716 3,868

Cash flows from investing activities:
Purchases of short-term investments (166) (95)
Proceeds from sale/maturity
of short-term investments 314 171
Purchases of long-term investments (942) (1,066)
Proceeds from sale/maturity
of long-term investments 135 565
Decrease/(increase) in
other long-term assets 73 (37)
Property acquired (1,095) (1,620)
Proceeds from sale of property
and other long-term assets 13 20
Net cash used in investing activities (1,668) (2,062)

Cash flows from financing activities:
Net decrease in short-term borrowings (987) (873)
Proceeds from issuance of long-term debt - 11
Repayment of long-term debt (16) (555)
Proceeds from issuance of common stock
under employee stock purchase plan 37 39
Proceeds from issuance of common stock
from stock options exercised 7 11
Cash dividend payments (259) (242)
Repurchase of common stock - (2)
Excess tax benefits of share-based payments - 1
Net cash used in financing activities (1,218) (1,610)

Effect of exchange rate changes on cash 12 -

Net increase in cash and cash equivalents 842 196
Cash and cash equivalents, beginning of period 245 281
Cash and cash equivalents, end of period $1,087 $477

SOURCE Lowe's Companies, Inc.

Shareholders'/Analysts' Inquiries: Paul Taaffe, +1-704-758-2033, Media
Inquiries: Chris Ahearn, +1-704-758-2304, both of Lowe's