Lowe's Companies (LOW) 8-K Results of Operations and Financial Condition

Exhibit 99.1

May 21, 2007

For 7:00 am EDT Release

Contacts:	Shareholders’/Analysts’ Inquiries:	Media Inquiries:
	Robbin Moore-Randolph	Karen Cobb
	704-758-3579	704-758-3504

LOWE’S REPORTS FIRST QUARTER SALES AND EARNINGS RESULTS

MOORESVILLE, N.C. - Lowe’s Companies, Inc. (NYSE: LOW), the world’s second-largest home improvement retailer, today reported net earnings of $739 million for the quarter ended May 4, 2007, a 12.1 percent decline versus the same period a year ago. Diluted earnings per share declined 9.4 percent to $0.48 from $0.53 in the first quarter of 2006.

Sales for the quarter increased 2.1% percent to $12.2 billion, up from $11.9 billion in the first quarter of 2006. Comparable store sales for the first quarter declined 6.3 percent.

“Multiple factors, including a difficult housing market in many areas, tough comparisons to hurricane rebuilding efforts, and significant lumber and plywood price deflation, continued to create a challenging sales environment in the first quarter,” commented Robert A. Niblock, Lowe’s chairman and CEO.“Those anticipated factors were compounded by mixed weather during the quarter. Mild temperatures and solid sales in March were more than offset by record cold and wet weather across much of the U.S. during the first two weeks of April. While the weather improved in the second half of the month, the drag created by the first two weeks substantially contributed to our sales shortfall to plan.

“We continued to gain market share during the quarter despite the challenging sales environment and credit that success to our commitment to providing great stores and great products as well as our employees’ commitment to customer service. Easier comparisons in the back half of the year give us continued confidence that our sales performance will improve as the year progresses.”

During the quarter, Lowe’s opened 15 new stores. As of May 4, 2007, Lowe’s operated 1,400 stores in 49 states representing 158.7 million square feet of retail selling space, an 11.2 percent increase over last year.

A conference call to discuss first quarter 2007 operating results is scheduled for today (Monday, May 21) at 9:00 a.m. EST. Please dial 888-817-4020 (international callers dial 706-679-8762) to participate. A webcast of the call will take place simultaneously and can be accessed by visiting Lowe’s website at www.Lowes.com/investor and clicking on Lowe’s First Quarter 2007 Earnings Conference Call Webcast. A replay of the call will be archived on Lowes.com until August 19, 2007.

 Lowe's Business Outlook

Second Quarter 2007 (comparisons to second quarter 2006)

·   The company expects to open 26 new stores reflecting square footage growth of approximately 11 percent

·   Total sales are expected to increase 6 to 7 percent

·   The company expects to report a comparable store sales decline of 1 to 3 percent

·   Operating margin (defined as gross margin less SG&A and depreciation) is expected to decline approximately 40 basis points

·   Store opening costs are expected to be approximately $35 million

·   Diluted earnings per share of $0.62 to $0.64 are expected

·   Lowe’s second quarter ends on August 3, 2007 with operating results to be publicly released on Monday, August 20, 2007

Fiscal Year 2007 (comparisons to fiscal year 2006)

·   The company expects to open 150 to 160 stores in 2007 reflecting total square footage growth of approximately 11 percent

·   Total sales are expected to increase approximately 7 percent

·   The company expects comparable store sales to decline 1 to 2 percent

·   Operating margin (defined as gross margin less SG&A and depreciation) is expected to decline 70 to 80 basis points

·   Store opening costs are expected to be $140 to $145 million

·   Diluted earnings per share of $1.99 to $2.03 are expected for the fiscal year ending February 1, 2008

 Disclosure Regarding Forward-Looking Statements

This news release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”).  Statements of the company’s expectations for sales growth, comparable store sales, earnings and performance, capital expenditures, store openings, demand for services, and any statement of an assumption underlying any of the foregoing, constitute “forward-looking statements” under the Act.  Although the company believes that the expectations, opinions, projections, and comments reflected in its forward-looking statements are reasonable, it can give no assurance that such statements will prove to be correct. A wide-variety of potential risks, uncertainties, and other factors could materially affect our ability to achieve the results expressed or implied by our forward-looking statements including, but not limited to, changes in general economic conditions, such as interest rate and currency fluctuations, fuel and other energy costs, slower growth in personal income and other factors which can negatively affect our customers as well as our ability to: (i) respond to decreases in the number of new housing starts and the level of repairs, remodeling, and additions to existing homes, as well as general reduction in commercial building activity; (ii) secure, develop, and otherwise implement new technologies and processes designed to enhance our efficiency and competitiveness; (iii) attract, train, and retain highly-qualified associates; (iv) locate, secure, and develop new sites for store development; (v) respond to fluctuations in the prices and availability of services, supplies, and products; (vi) respond to the growth and impact of competition; (vii) address legal and regulatory matters; and (viii) respond to unanticipated weather conditions.  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 and the descriptions of any material changes in those “Risk Factors” included in our subsequent Quarterly Reports on Form 10-Q.

The forward-looking statements contained in this news release speak only as of the date of this release and the company does not assume any obligation to update any such statements.

With fiscal year 2006 sales of $46.9 billion, Lowe’s Companies, Inc. is a FORTUNE® 50 company that serves approximately 13 million customers a week at more than 1,400 home improvement stores in 49 states. Based in Mooresville, N.C., the 60-year old company is the second-largest home improvement retailer in the world. For more information, visit Lowes.com.

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Lowe's Companies, Inc.
Consolidated Statements of Current and Retained Earnings (Unaudited)
In Millions, Except Per Share Data
	Three Months Ended
	May 4, 2007					May 5, 2006
Current Earnings	Amount			Percent		Amount			Percent
Net sales	$	12,172			100.00	$	11,921			100.00
Cost of sales		7,913			65.01		7,752			65.03
Gross margin		4,259			34.99		4,169			34.97
Expenses:
Selling, general and administrative		2,685			22.06		2,467			20.69
Store opening costs		12			0.10		25			0.21
Depreciation		323			2.65		274			2.30
Interest - net		47			0.39		35			0.30
Total expenses		3,067			25.20		2,801			23.50
Pre-tax earnings		1,192			9.79		1,368			11.47
Income tax provision		453			3.72		527			4.41
Net earnings	$	739			6.07	$	841			7.06
Weighted average shares outstanding - basic		1,510					1,557
Basic earnings per share	$	0.49				$	0.54
Weighted average shares outstanding - diluted		1,540					1,590
Diluted earnings per share	$	0.48				$	0.53
Cash dividends per share	$	0.05				$	0.03
Retained Earnings
Balance at beginning of period	$	14,860				$	12,191
Cumulative effect adjustment 1		(8	)				-
Net earnings		739					841
Cash dividends		(75	)				(47	)
Share repurchases		(548	)				-
Balance at end of period	$	14,968				$	12,985

¹ The Company adopted FIN 48, Accounting for Uncertainty in Income Taxes, effective February 3, 2007.

Lowe's Companies, Inc.
Consolidated Balance Sheets
In Millions, Except Par Value Data
		(Unaudited)		(Unaudited)
		May 4,		May 5,		February 2,
		2007		2006		2007
Assets
Current assets:
Cash and cash equivalents		$	629	$	1,140	$	364
Short-term investments			571		517		432
Merchandise inventory - net			8,501		7,817		7,144
Deferred income taxes - net			201		175		161
Other current assets			155		139		213
Total current assets			10,057		9,788		8,314
Property, less accumulated depreciation			19,187		16,760		18,971
Long-term investments			406		277		165
Other assets			319		203		317
Total assets		$	29,969	$	27,028	$	27,767
Liabilities and shareholders' equity
Current liabilities:
Short-term borrowings		$	-	$	-	$	23
Current maturities of long-term debt			92		33		88
Accounts payable			5,211		4,553		3,524
Accrued salaries and wages			377		377		425
Self-insurance liabilities			661		613		650
Deferred revenue			851		853		731
Other current liabilities			1,429		1,551		1,098
Total current liabilities			8,621		7,980		6,539
Long-term debt, excluding current maturities			4,306		3,446		4,325
Deferred income taxes - net			657		717		735
Other long-term liabilities			659		304		443
Total liabilities			14,243		12,447		12,042
Shareholders' equity:
Preferred stock - $5 par value, none issued			-		-		-
Common stock - $.50 par value;
Shares issued and outstanding
May 4, 2007	1,506
May 5, 2006	1,555
February 2, 2007	1,525		753		778		762
Capital in excess of par value			-		816		102
Retained earnings			14,968		12,985		14,860
Accumulated other comprehensive income			5		2		1
Total shareholders' equity			15,726		14,581		15,725
Total liabilities and shareholders' equity		$	29,969	$	27,028	$	27,767

Lowe's Companies, Inc.
Consolidated Statements of Cash Flows (Unaudited)
In Millions
	Three Months Ended
	May 4, 2007			May 5, 2006
Cash flows from operating activities:
Net earnings	$	739		$	841
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation and amortization		345			290
Deferred income taxes		37			(38	)
Loss on disposition/writedown of fixed and other assets		4			8
Share-based payment expense		22			11
Changes in operating assets and liabilities:
Merchandise inventory - net		(1,357	)		(1,182	)
Other operating assets		63			(17	)
Accounts payable		1,687			1,721
Other operating liabilities		599			476
Net cash provided by operating activities		2,139			2,110
Cash flows from investing activities:
Purchases of short-term investments		(257	)		(146	)
Proceeds from sale/maturity of short-term investments		117			143
Purchases of long-term investments		(244	)		(72	)
Proceeds from sale/maturity of long-term investments		5			26
Increase in other long-term assets		(13	)		(3	)
Fixed assets acquired		(707	)		(732	)
Proceeds from the sale of fixed and other long-term assets		14			9
Net cash used in investing activities		(1,085	)		(775	)
Cash flows from financing activities:
Net decrease in short-term borrowings		(23	)		-
Proceeds from issuance of long-term debt		3			-
Repayment of long-term debt		(16	)		(7	)
Proceeds from issuance of common stock from stock options exercised		21			33
Cash dividend payments		(75	)		(47	)
Repurchase of common stock		(700	)		(600	)
Excess tax benefits of share-based payments		1			3
Net cash used in financing activities		(789	)		(618	)
Net increase in cash and cash equivalents		265			717
Cash and cash equivalents, beginning of period		364			423
Cash and cash equivalents, end of period	$	629		$	1,140