Lowe's 2007 Annual Report Download - page 4

2|LOWE’S 2007 ANNUAL REPORT
Certainly, a long list of factors affected our industry and led to disappointing sales results for
the year, but, in a challenging sales environment, strong companies look for opportunities to
gain strategic advantages and capture market share. That is exactly what we did in 2007.
Our total sales fell short of our expectations, but, in a year when relative performance was
as important as absolute results, we gained 80 basis points of total unit market share in
calendar 2007, according to third-party estimates. I want to thank our more than 215,000
employees whose customer focus allowed us to capture market share. Those share gains,
combined with appropriate expense management in a very challenging environment for the
home improvement industry, allowed us to deliver respectable earnings for the year.
Additional highlights from 2007 include the opening of our first store in Vermont. We have
broadened our reach and now have stores in all 50 states.We also celebrated a major milestone
in our Company’s history when we successfully opened our first stores outside the United States
in the Greater Toronto Area. We are excited to be serving home improvement consumers in
these vibrant markets.
Unfortunately, as we look to 2008, the external pressures facing our industry will likely persist,
and the sales environment remains challenging. We are working to further understand the
external drivers of our industry, but our ability to predict when these factors will shift in our
favor is limited.We will continue to monitor the structural drivers of demand, including housing
turnover, homeownership rates, relative home prices, employment and real disposable
personal income as well as consumer sentiment related to home improvement, but, in the
end, we remain focused on what we can control: providing great customer service while
managing expenses and capital spending while offering customers the best shopping
experience in home improvement.
We remain passionate about customer service. Knowledgeable and engaged employees, ready
to assist customers with their home maintenance and improvement needs, are a competitive
advantage. We work to enhance that advantage through ongoing training to sharpen selling,
product knowledge and customer service skills in order to maintain our sales culture.
We continue to identify ways to enhance our already strong product offering and work to ensure
customers have a great shopping experience in our best-in-class stores. Our stores feature great
displays and easy-to-understand signage that provide customers the information needed
to complete routine maintenance and inspire them to tackle new projects. We’re working
closely with our product vendors to offer customers what we’ve termed “Innovation at a
value.” Innovation has historically come with a price, but this initiative strives to provide
customers with innovative and inspirational products at all points in the price continuum.
WE REMAIN FOCUSED ON
WHAT WE CAN CONTROL:
PROVIDING GREAT
CUSTOMER SERVICE WHILE
MANAGING EXPENSES AND
CAPITAL SPENDING WHILE
OFFERING CUSTOMERS
THE BEST SHOPPING
EXPERIENCE IN
HOME IMPROVEMENT.
IN A CHALLENGING SALES
ENVIRONMENT, STRONG
COMPANIES LOOK FOR
OPPORTUNITIES TO GAIN
STRATEGIC ADVANTAGES
AND CAPTURE MARKET
SHARE. THAT IS EXACTLY
WHAT WE DID IN 2007.