Lowe's 2010 Annual Report Download - page 30

26 LOWE’S 2010 ANNUAL REPORT
We speak throughout this Annual Report to Lowe’s Shareholders in
forward-looking statements about our future, particularly in the “Letter to
Shareholders” and “Management’s Discussion and Analysis of Financial
Condition฀and฀Results฀of฀Operations.”฀The฀words฀“believe,”฀“expect,”฀
“will,”฀“should,”฀and฀other฀similar฀expressions฀are฀intended฀to฀identify฀
those฀forward-looking฀statements.฀While฀we฀believe฀our฀expectations฀
are reasonable, they are not guarantees of future performance. Our
actual฀results฀could฀differ฀substantially฀from฀our฀expectations฀because,฀
for฀example:
•฀฀Our฀sales฀are฀dependent฀upon฀the฀health฀and฀stability฀of฀the฀
general economy, which is still recovering slowly from a prolonged
period of recession that was made worse by a severe accompany-
ing financial/credit crisis. Sustained high rates of unemployment, the
psychological effect of falling home prices, consumer deleveraging
and reduced access to credit, through mortgage financing and
otherwise, and reduced consumer confidence are continuing to
constrain consumer spending, particularly on many of the discre-
tionary, bigger-ticket products we sell.
•฀฀Sales฀in฀many฀of฀our฀product฀categories฀are฀driven฀by฀the฀activity฀
level of home improvement projects. Adverse changes in economic
factors specific to the home improvement industry may negatively
affect the rate of growth of our total sales and comparable
store sales.
•฀฀Our฀sales,฀particularly฀of฀seasonal฀merchandise,฀may฀be฀impacted฀
by unseasonable weather.
•฀฀Changes฀in฀existing฀or฀new฀laws฀and฀regulations฀that฀affect฀
employment/labor, trade, product safety, transportation/
logistics,฀energy฀costs,฀health฀care,฀tax฀or฀environmental฀issues฀
could have an adverse impact, directly or indirectly, on our
financial condition and results of operations.
•฀฀Our฀business฀is฀highly฀competitive,฀and฀our฀many฀competitors฀
could take sales and market share from us if we fail to effectively
execute฀our฀merchandising,฀marketing฀and฀distribution฀strategies.฀
•฀฀The฀success฀of฀our฀strategic฀business฀initiatives฀designed฀to฀
increase our sales and capture a greater percentage of our
customers’฀expenditures฀on฀home฀improvement฀projects฀is฀
dependent in varying degrees on the timely delivery and func-
tionality of information technology systems to support them.
•฀฀We฀may฀not฀be฀able฀to฀realize฀the฀full฀benets฀of฀some฀of฀our฀
strategic business initiatives if our employees or third-party
installers and repair technicians are unable to accept and
embrace changes in our business model.
•฀฀The฀failure฀to฀effectively฀manage฀our฀relationships฀with฀suppliers฀
of brand name products that are popular with our customers
could negatively impact our business plan and financial results.
•฀฀Expanding฀internationally฀presents฀unique฀challenges฀that฀will฀
require us to continue to adapt our store operations, merchan-
dising and distribution functions and to work effectively with our
joint venture partner in Australia.
•฀฀The฀failure฀to฀properly฀maintain฀our฀critical฀information฀systems฀or฀
a serious disruption of those systems could negatively impact our
financial performance. Performance issues with new customer-
facing technology systems could negatively affect our strategic
business initiatives that are dependent on those systems.
•฀฀Our฀sales฀are฀impacted฀by฀our฀ability฀to฀secure฀and฀retain฀a฀highly฀
qualied฀and฀adaptable฀workforce฀with฀expanded฀skill฀sets฀who฀
can work effectively and collaboratively in an increasingly culturally
diverse environment which is an important element of our future
growth strategy.
•฀฀The฀failure฀of฀a฀key฀vendor฀or฀service฀provider฀that฀we฀cannot฀
quickly replace could disrupt our operations and negatively
impact our business.
•฀฀The฀ability฀to฀continue฀our฀everyday,฀low฀pricing฀strategy฀and฀
provide the products that customers want depends on our vendors
providing a reliable supply of products at competitive prices and our
ability to effectively manage our inventory. If the domestic or interna-
tional supply chain for our products is disrupted, our sales and gross
margin would be adversely impacted.
•฀฀Product฀and฀service฀quality฀issues฀could฀negatively฀affect฀customer฀
confidence in Lowe’s and the Company’s brand image and, in some
instances, also result in product recalls and potential product liability
and product warranty claims.
For more information about these and other risks and uncertainties
that฀we฀are฀exposed฀to,฀you฀should฀read฀the฀“Risk฀Factors”฀included฀in฀
our Annual Report on Form 10-K to the United States Securities and
Exchange฀Commission.฀All฀forward-looking฀statements฀in฀this฀Annual฀
Report to Lowe’s shareholders speak only as of the date of this report or,
in the case of any document incorporated by reference, the date of that
document. All subsequent written and oral forward-looking statements
attributable to us or any person acting on our behalf are qualified by the
cautionary statements in this section and in the “Risk Factors” included
in our Annual Report on Form 10-K. We do not undertake any obligation
to update or publicly release any revisions to forward-looking statements
to฀reect฀events,฀circumstances฀or฀changes฀in฀expectations฀after฀the฀
date of this report.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS