Lowe's 2009 Annual Report Download - page 3

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And  ere’s
No Store Like
Lowe’s
Fiscal 2009 was challenging on many
fronts. e year began with multiple
external pressures weighing on our
industry, including falling home prices,
rising unemployment and tightening
credit markets. As the year unfolded,
however, some encouraging signs in
the broader economy began to surface,
suggesting the worst may be behind
us. Consumer sentiment measures
recovered slightly from historic lows,
housing turnover began showing signs
of bottoming and home prices slowed
their rate of decline. We ended the
year with sales totaling $47.2 billion,
down 2.1 percent from 2008.
While our comparable store sales
remained negative throughout 2009,
we experienced sequentially improving
trends as the year progressed, and our
results in markets that were most
aff ected by over-heated housing
began showing signs of stabilization.
Additionally, big-ticket, project-related
sales showed signifi cant sequential
improvement in the second half of the
year. We view these as encouraging
signs that consumers are feeling less
concerned about the future and are
starting to tackle more discretionary
home improvement projects.
Even in these uncertain economic
times, affi nity for the home remains
strong. e home improvement to-do
list is still on the refrigerator and includes
most of the same projects as in the past.
What has changed in many cases is
consumers’ approach to, and perhaps
the timing of, completing those projects.
Consumers have slowed their rate
of spending in recent years and are
looking for ways to save. at mindset
has homeowners doing more work
themselves with a keen focus on main-
tenance and smaller repair projects,
while more discretionary projects
have been postponed. is resurgence
of do-it-yourself (DIY) has many
homeowners tackling projects for the
fi rst time, and we have increased staff -
ing levels accordingly to ensure we are
ready to serve customers and provide
knowledgeable advice in heavy DIY
categories like paint.
roughout this economic cycle we
reduced expenses to preserve profi tability
as sales slowed, while maintaining a
keen focus on fi nding the right balance
between closely managing expenses
and investing in our business to ensure
we continue to deliver the excellent
service consumers expect from Lowe’s.
I think a good measure of our success
in striking that balance is our market
share gains over the past several years.
According to independent measures,
we gained 100 basis points of unit
market share in 2009, a good indication
we are increasingly the store of choice
for home improvement.
Looking forward, it appears the
housing correction process is well
underway, but there is clearly still
progress to be made, and elevated
unemployment remains a concern.
Balancing the pros and cons of the
external environment, I feel consumers
are entering 2010 with cautious opti-
mism. Our improving results late in
2009 support that theory and suggest
some homeowners are beginning to
Robert A. Niblock
Chairman of the Board and
Chief Executive Offi cer
1