Lowe's Third Quarter Earnings off 10.2%

Mooresville, NC, November 19, 2007—November 19, 2007—Lowe’s reported net earnings for the third quarter that declined 10.2% to $643 million.  Earnings per share in the quarter were off 6.5% to $0.43 from $0.46 in the third quarter of 2006.

Analysts had forecast earnings per share of $0.41 for the quarter.

Sales for the quarter increased 3.2% to $11.6 billion, up from $11.2 billion in the third quarter of 2006.

For the nine months of 2007, net earnings were off 3.7% to $2.40 billion, earnings per share declined 0.6% to $1.58.

For the nine month period sales increased 3.8% to $37.9 billion.

Comparable store sales declined 4.3% for both the third quarter and first nine months of 2007.

The company said its ongoing commitment to maintain a safe shopping and working environment resulted in improved claims experience, which led to a $112 million reduction in self-insurance liabilities for workers compensation and general liability claims. The change increased diluted earnings per share by approximately $0.05.

“Our sales for the quarter fell short of our expectations, but disciplined expense management and ongoing safety initiatives combined with rational and targeted promotions enabled us to deliver earnings per share at the low end of our guidance," said CEO Robert Niblock.

"Many external factors contributed to the weak sales environment, including a continuing housing correction, drought conditions in several U.S. markets, and slower than expected sales in Gulf markets. Clearly the largest of these impacts was the unstable housing environment evidenced by an even steeper decline in housing turnover, falling home prices in many markets, and a near record inventory of homes for sale. Despite these factors, Lowe's continues to gain market share according to third party estimates.” Coast

Niblock said that pressures on the industry are likely to continue well into 2008.

During the quarter, Lowe's opened 40 new stores. As of November 2, Lowe's operated 1,464 stores in 49 states, representing 166.1 million square feet of retail selling space, a 10.1 percent increase over last year.

Lowe’s expects to open approximately 72 new stores in the fourth quarter and sales are expected to increase approximately 3%. The company expects comparable store sales to decline 3 to 5%.