Lowe's 2009 Annual Report Download - page 17

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15
e Pursuit of PROFITABLE Growth
Q & A with Bob Hull, Chief Financial Offi cer
How do you measure success?
In addition to our responsibilities
related to compliance and stakeholder
communications, the Finance team
is focused on three things: improving
profi tability, generating free cash fl ow
and returning capital to shareholders.
ese are our primary measures of
success. We also work cross-function-
ally to ensure we have metrics in place
to evaluate and measure the success
of our initiatives. ese initiatives
include domestic store expansion,
investments in existing stores, as well
as strategic initiatives such as inter-
national expansion, additional CBC
capabilities, appliance repair services
and the Lowes.com platform to
name a few.
During the soft sales environment,
some have asked if Lowe’s could have
cut expenses deeper to drive better
bottom-line results. What’s your
approach to expense management?
e answer depends on your measure-
ment period. If the goal is to maximize
the current quarter’s results, then yes we
probably could have reduced expenses
further. However, overly focusing on
today, especially during the “great
recession,” can have disastrous conse-
quences for the future. We manage
the business for the long term.
Ahead of any major initiative
or expenditure, we discuss both the
qualitative and quantitative intended
outcomes and how they are going to
be measured. While we are focused
on effi ciently managing our business
today, we are also aware that the
environment will improve and there
is profi table market share to be had.
is is why we added the DCAS and
PSE positions in 2009. Mike Brown
and I have frequent conversations
regarding store payroll. We discuss labor
effi ciencies to fi nd the right balance
between expense control and eff ective
customer service.
is environment has certainly had
us asking more questions. We have a
cross-functional Cost Reduction
Committee to identify opportunities
to reduce expenses across stores, distri-
bution centers and the corporate offi ce.
In 2009, here are a few examples of cost
reductions realized: store grounds keep-
ing and landscaping, store parking lot
seal coating and restriping, distribution