Lowe's 2002 Annual Report Download - page 5

FINANCIAL HIGHLIGHTS
IN MILLIONS, EXCEPT PER SHARE DATA
* Basis po ints
Sales 19.8% $26,491 $ 22,111
Gross Margin Percentage 150 bps* 30.3% 28.8%
Pretax Earnings 45.2% $2,359 $ 1,624
Net Earnings 43.8% $1,471 $ 1,023
Earnings Per Share
Basic 42.1% $1.89 $ 1.33
Diluted 42.3% $1.85 $ 1.30
Cash Dividends Per Share 6.3% $0.09 $ 0.08
Increase over ’01 Fiscal ’02 Fiscal ’01
In a year marked by a sputtering economy, escalating geopolitical concerns and declining consumer confidence, Lowe’s
employees delivered what I feel was the best year in our 57-year history. They did it with a dedication to executing the
fundamentals of retailing and never losing focus on serving our customers’ needs. The talent of our employees and
quality of our results led to Lowe’s being recognized as America’s Most Admired Specialty Retailer by FORTUNE
magazine, an accolade representative of our employees’ hard work and dedication as well as the outstanding support
we receive from our vendor partners.
Despite the broader macro-economic concerns of 2002, the housing sector remained strong. Driven by low
mortgage rates, a strong refinancing cycle, positive demographic and psycho-graphic trends, as well as an ever-growing
immigrant population, the sale of both new and existing homes reached record levels in 2002.
As the broader economy wavered, home improvement remained resilient.
Against the turbulent backdrop of mixed economic signals, I’m proud of the results our stores were able to deliver
in fiscal 2002. Sales totaled $26.5 billion, an increase of 19.8 percent over fiscal 2001. Comparable store sales
increased 5.6 percent for the year. Encouragingly, our sales performance in 2002 was balanced across the country as
well as across all product categories. This balance speaks to the national strength of the home improvement consumer
despite the many concerns that continue to weigh on the economy. In 2002, we added 123 new stores in great
markets around the country bringing our total store count to 854.
Gross margin reached a record high of 30.3 percent in 2002. In today’s competitive environment, where we remain
committed to Every Day Low Prices, our ability to drive gross margins higher is attributable to many factors.
First, our “Up The Continuum” merchandising strategy, which is guided by our customers’ desire to make their
homes unique and expressive of their individual personalities, continues to pay dividends. Our merchants continue to
work diligently to offer quality products that provide value across all price points in our lines. Their success is
measured by strong sales, higher average tickets and growing margins.
In addition, we’ve continued to capitalize on opportunities provided by our global sourcing offices in Asia and other
parts of the world. We see opportunity to enhance margin by increasing our percentage of foreign-sourced product in
the years to come.