Lowe's 2007 Annual Report Download - page 3

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Letter To
SHAREHOLDERS
Iwould like to begin by acknowledging what is obvious to those who followed the
company’s results over the past year: 2007 presented a very difficult sales environment
for Lowe’s and the home improvement industry.
With more than 60 years of retail experience, we have weathered many cycles, but frankly,
we were ready to close the books on 2007.The year was marked by unprecedented softening
of the housing market as a rapid decline in housing turnover pressured home prices in many
areas of the United States and consumers reduced home improvement spending. In addition,
tightened mortgage lending standards and reduced credit availability in the back half of the
year affected consumers’ access to capital and further impacted our sales.
We saw dramatic regional differences in our sales as the dynamics of the housing market
varied widely across the United States. Markets like California and Florida that experienced
the biggest declines in home prices and the most pronounced slowdown in housing turnover
delivered our worst relative sales results. While routine home maintenance continued in most
markets, consumers acted cautiously regarding discretionary purchases and were hesitant to
begin big-ticket projects, especially in the most pressured markets.
And, if that weren’t enough, unseasonable weather, including exceptional drought in certain areas
of the United States, exacerbated an already challenging sales environment.
LOWE’S 2007 ANNUAL REPORT |1
Robert A. Niblock
Chairman of the Board and Chief Executive Officer
WITH MORE THAN 60 YEARS
OF RETAIL EXPERIENCE,
WE HAVE WEATHERED
MANY CYCLES.