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1
Part I
Item 1 - Business
General Information
Lowe’s Companies, Inc. and subsidiaries (the Company or Lowe’s) is a Fortune® 50 company and the world’s second largest
home improvement retailer. As of January 29, 2016, Lowe’s operated 1,857 home improvement and hardware stores,
representing approximately 202 million square feet of retail selling space. Lowe’s is comprised of 1,805 stores located across
50 U.S. states, including 80 Orchard Supply Hardware (Orchard) stores in California and Oregon, as well as 42 stores in
Canada, and 10 stores in Mexico.
Lowe’s was incorporated in North Carolina in 1952 and has been publicly held since 1961. The Company’s common stock is
listed on the New York Stock Exchange - ticker symbol “LOW”.
See Item 6, “Selected Financial Data”, of this Annual Report on Form 10-K, for historical revenues, profits and identifiable
assets. For additional information about the Company’s performance and financial condition, see also Item 7, “Management’s
Discussion and Analysis of Financial Condition and Results of Operations”, of this Annual Report on Form 10-K.
Customers, Market and Competition
Our Customers
We serve homeowners, renters, and professional customers (Pro customers). Retail customers, comprised of individual
homeowners and renters, complete a wide array of projects and vary along the spectrum of do-it-yourself (DIY) and do-it-for-
me (DIFM). The Pro customer consists of two broad categories: construction trades; and maintenance, repair & operations.
Our Market
We are among the many businesses, including home centers, paint stores, hardware stores, lumber yards and garden centers,
whose revenues are included in the Building Material and Garden Equipment and Supplies Dealers Subsector (444) of the
Retail Trade Sector of the North American Industry Classification System (NAICS), the standard used by Federal statistical
agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to
the U.S. business economy. The total annual revenue reported for businesses included in NAICS 444 in 2015 was $332.1
billion, which represented an increase of 4.2% over the amount reported for the same category in 2014. The total annual
revenue reported for businesses included in NAICS 444 in 2014 was $318.7 billion, which represented an increase of 5.5%
over the amount reported for the same category in 2013. These figures are subject to periodic revision by the U.S. Department
of Commerce.
NAICS 444 represents less than half of what we consider the total market for our products and services. The broader market in
which Lowe’s operates includes home-related sales through a variety of companies beyond those in NAICS 444. These consist
of other companies in the retail sector, including mass retailers, home furnishings stores, and online retailers, as well as
wholesalers that provide home-related products and services to homeowners, businesses, and the government. Based on our
analysis of the most recent comprehensive data available, we estimate the size of the U.S. home improvement market at $735
billion in 2015, comprised of $548 billion of product sales and $187 billion of installed labor sales. That compares with $688
billion total market sales in 2014, comprised of $511 billion of product sales and $177 billion of installed labor sales. These
figures are subject to periodic revision by the U.S. Department of Commerce and other third-party sources.
There are many variables that affect consumer demand for the home improvement products and services Lowe’s offers. Key
indicators we monitor include real disposable personal income, employment, home prices, and housing turnover. We also
monitor demographic and societal trends that shape home improvement industry growth.
• Growth in real disposable personal income is projected to moderate to 2.9% in 2016 as compared with 3.4% growth in
2015, based on the March 2016 Blue Chip Economic Indicators®. *
*Blue Chip Economic Indicators® (ISSN: 0193-4600) is published monthly by Aspen Publishers, 76 Ninth Avenue, New York, NY 10011, a
division of Wolters Kluwer Law and Business. Printed in the U.S.A.