Lowe's 2007 Annual Report Download - page 16

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The Opportunity To Improve Execution
For Greater EFFICIENCY
DISTRIBUTION An effective distribution network helps drive profitability by
efficiently moving freight, ensuring our stores are appropriately stocked and
minimizing inventory investment. Lowe’s logistics and distribution network is
a competitive advantage that works behind the scenes to ensure, in all sales
environments, that our stores have the right products at the right time. As we
further penetrate U.S. markets, our extensive distribution network, including
13 regional distribution centers, 14 flatbed distribution centers, four import
facilities and three transloads supports our continued growth. Over the past
five years we have invested more than $1 billion in our network, leveraging
our scale and capabilities to improve service to our stores and enhanced
our profitability.
EXPENSE MANAGEMENT In all sales environments, we look for ways to
become more efficient in our operations. We continue to identify areas where there
are opportunities to reduce expenses without sacrificing customer service. In 2007,
we renegotiated the purchasing of store supplies, including register tape and plastic
shopping bags. We also saw an opportunity to reduce redundant and unnecessary
signs that were not adding value to the customer shopping experience. By streamlin-
ing our store physical inventory process, we gained greater efficiencies and reduced
the time spent on this non-selling activity. These are just a few examples of our
approach to disciplined expense management that helps us drive efficiency.
14 |LOWE’S 2007 ANNUAL REPORT
Net Earnings
In Millions of Dollars
03 04 05 06 07
Over the past five years, net earnings have
grown from $1.8 billion to $2.8 billion,
a 14% compound annual growth rate.