Lowe's Companies (LOW) 8-K Lowe’s Reports Third Quarter Sales and Earnings Results

Exhibit 99.1

                                                      ;             

November 17, 2008

For 7:00 am EST Release

Contacts:	Shareholders’/Analysts’ Inquiries:	Media Inquiries:
	Robbin Moore-Randolph	Chris Ahearn
	704-758-3579	704-758-2304

LOWE’S REPORTS THIRD 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 $488 million for the quarter ended October 31, 2008, a 24.1 percent decline from the same period a year ago.  Diluted earnings per share declined 23.3 percent to $0.33 from $0.43 in the third quarter of 2007.  For the nine months ended October 31, 2008, net earnings declined 15.3 percent to $2.03 billion while diluted earnings per share declined 12.7 percent to $1.38.

Sales for the quarter increased 1.4 percent to $11.7 billion, up from $11.6 billion in the third quarter of 2007.  For the nine months ended October 31, 2008, sales increased 0.9 percent to $38.2 billion.  Comparable store sales for the third quarter declined 5.9 percent and declined 6.5 percent in the first nine months of 2008.

“Thanks to our employees’ hard work and dedication in this difficult environment, we achieved sales results within our guidance and earnings that exceeded our guidance,” commented Robert A. Niblock, Lowe’s chairman and CEO.  “During the quarter, products related to ongoing home maintenance and outdoor projects continued to perform relatively well.  Also, we experienced a hurricane-related sales lift in the Gulf Coast as residents repaired storm damage.  However, consumers continued to delay discretionary home improvement and bigger ticket purchases, which resulted in negative comparable store sales in the quarter.

“We expect continued, broad-based external pressures on our industry, as rising unemployment, falling home prices, tight credit and volatile equity markets continue to erode consumer confidence and impact sales,” Niblock added.  “While falling energy prices and initial signs of stabilization in housing turnover should aid the consumer, we saw a decline in sales trends in the last week of October that continued into November as the overall economic outlook deteriorated.  In light of the difficult environment, we remain cautious in the near term and focused on providing great service to customers, increasing market share, controlling expenses, and appropriately managing capital expenditures to drive long-term returns for shareholders.”

During the quarter, Lowe’s opened 39 new stores.  As of October 31, 2008, Lowe’s operated 1,616 stores in the United States and Canada representing 183.0 million square feet of retail selling space, a 10.2 percent increase over last year.

A conference call to discuss third quarter 2008 operating results is scheduled for today (Monday, November 17) at 9:00 am 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 Third Quarter 2008 Earnings Conference Call Webcast.  A replay of the call will be archived on Lowes.com until February 19, 2009.

 Lowe’s Business Outlook

Fourth Quarter 2008 (comparisons to fourth quarter 2007)

·   The company expects to open 33 to 38 new stores reflecting square footage growth of 7 to 8 percent

·   Total sales are expected to range from a decline of 3 percent to an increase of 2 percent

·   The company expects comparable store sales to decline 5 to 10 percent

·   Earnings before interest and taxes as a percentage of sales (operating margin) is expected to decline approximately 330 basis points driven by payroll, fixed cost and depreciation deleverage

·   Store opening costs are expected to be approximately $31 million

·   Diluted earnings per share of $0.08 to $0.16 are expected

·   Lowe’s fourth quarter ends on January 30, 2009 with operating results to be publicly released on Friday, February 20, 2009

Fiscal Year 2008 (comparisons to fiscal year 2007)

·   The company expects to open 115 to 120 stores in 2008 reflecting total square footage growth of 7 to 8 percent

·   Total sales are expected to range from flat to an increase of 1 percent

·   The company expects comparable store sales to decline 6 to 7 percent

·   Earnings before interest and taxes as a percentage of sales (operating margin) is expected to decline approximately 190 basis points

·   Store opening costs are expected to be approximately $100 million

·   Diluted earnings per share of $1.46 to $1.54 are expected for the fiscal year ending January 30, 2009

 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, the housing market, the home improvement industry, 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 rising unemployment, interest rate and currency fluctuations, higher fuel and other energy costs, slower growth in personal income, changes in consumer spending, the availability of consumer credit and mortgage financing, changes in the rate of housing turnover, inflation or deflation of commodity prices and other factors which can negatively affect our customers, as well as our ability to:  (i) respond to adverse trends in the housing industry 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 successfully develop new sites for store development particularly in major metropolitan markets; (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 developments; and (viii) respond to unanticipated weather conditions that could adversely affect sales.  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 description of material changes, if any, in those “Risk Factors”  included in our 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 2007 sales of $48.3 billion, Lowe’s Companies, Inc. is a FORTUNE® 50 company that serves approximately 14 million customers a week at more than 1,600 home improvement stores in the United States and Canada. Founded in 1946 and based in Mooresville, N.C., Lowe’s 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										Nine Months Ended
	October 31, 2008					November 2, 2007					October 31, 2008					November 2, 2007
Current Earnings	Amount			Percent		Amount			Percent		Amount			Percent		Amount			Percent
Net sales	$	11,728			100.00	$	11,565			100.00	$	38,246			100.00	$	37,904			100.00
Cost of sales		7,743			66.02		7,601			65.73		25,113			65.66		24,798			65.42
Gross margin		3,985			33.98		3,964			34.27		13,133			34.34		13,106			34.58
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Expenses:
Selling, general and administrative		2,726			23.23		2,503			21.63		8,464			22.13		8,026			21.17
Store opening costs		31			0.27		41			0.36		70			0.18		79			0.21
Depreciation		385			3.29		340			2.94		1,142			2.99		995			2.63
Interest - net		65			0.56		50			0.43		210			0.55		148			0.39
Total expenses		3,207			27.35		2,934			25.36		9,886			25.85		9,248			24.40
Pre-tax earnings		778			6.63		1,030			8.91		3,247			8.49		3,858			10.18
Income tax provision		290			2.47		387			3.35		1,214			3.17		1,457			3.85
Net earnings	$	488			4.16	$	643			5.56	$	2,033			5.32	$	2,401			6.33
Weighted average shares outstanding - basic		1,459					1,470					1,456					1,490
Basic earnings per share	$	0.33				$	0.44				$	1.40				$	1.61
Weighted average shares outstanding - diluted		1,464					1,497					1,473					1,519
Diluted earnings per share	$	0.33				$	0.43				$	1.38				$	1.58
Cash dividends per share	$	0.085				$	0.080				$	0.250				$	0.210
Retained Earnings
Balance at beginning of period	$	16,648				$	15,210				$	15,345				$	14,860
Cumulative effect adjustment1		-					-					-					(8	)
Net earnings		488					643					2,033					2,401
Cash dividends		(124	)				(118	)				(366	)				(312	)
Share repurchases		-					(454	)				-					(1,660	)
Balance at end of period	$	17,012				$	15,281				$	17,012				$	15,281
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)
		October 31, 2008			November 2, 2007		February 1, 2008
Assets
Current assets:
Cash and cash equivalents		$	322		$	336	$	281
Short-term investments (includes $33 million of trading securities at
October 31, 2008)			445			231		249
Merchandise inventory - net			8,327			7,775		7,611
Deferred income taxes - net			230			241		247
Other current assets			197			193		298
Total current assets			9,521			8,776		8,686
Property, less accumulated depreciation			22,602			20,755		21,361
Long-term investments			466			333		509
Other assets			440			325		313
Total assets		$	33,029		$	30,189	$	30,869
Liabilities and shareholders' equity
Current liabilities:
Short-term borrowings		$	249		$	16	$	1,064
Current maturities of long-term debt			34			35		40
Accounts payable			4,831			3,895		3,713
Accrued compensation and employee benefits			516			512		467
Self-insurance liabilities			723			653		671
Deferred revenue			748			793		717
Other current liabilities			1,330			1,288		1,079
Total current liabilities			8,431			7,192		7,751
Long-term debt, excluding current maturities			5,044			5,580		5,576
Deferred income taxes - net			751			615		670
Other liabilities			846			748		774
Total liabilities			15,072			14,135		14,771
Shareholders' equity:
Preferred stock - $5 par value, none issued			-			-		-
Common stock - $.50 par value;
Shares issued and outstanding
October 31, 2008	1,467
November 2, 2007	1,470
February 1, 2008	1,458		734			735		729
Capital in excess of par value			215			20		16
Retained earnings			17,012			15,281		15,345
Accumulated other comprehensive (loss) income			(4	)		18		8
Total shareholders' equity			17,957			16,054		16,098
Total liabilities and shareholders' equity		$	33,029		$	30,189	$	30,869

Lowe's Companies, Inc.
Consolidated Statements of Cash Flows (Unaudited)
In Millions
	Nine Months Ended
	October 31, 2008			November 2, 2007
Cash flows from operating activities:
Net earnings	$	2,033		$	2,401
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		1,232			1,069
Deferred income taxes		99			(42	)
Loss on property and other assets		48			33
Loss on redemption of long-term debt		8			-
Share-based payment expense		79			69
Changes in operating assets and liabilities:
Merchandise inventory - net		(725	)		(630	)
Other operating assets		77			43
Accounts payable		1,124			368
Other operating liabilities		383			474
Net cash provided by operating activities		4,358			3,785
Cash flows from investing activities:
Purchases of short-term investments		(179	)		(592	)
Proceeds from sale/maturity of short-term investments		265			853
Purchases of long-term investments		(1,097	)		(1,286	)
Proceeds from sale/maturity of long-term investments		837			1,057
Increase in other long-term assets		(53	)		(20	)
Property acquired		(2,539	)		(2,912	)
Proceeds from sale of property and other long-term assets		26			51
Net cash used in investing activities		(2,740	)		(2,849	)
Cash flows from financing activities:
Net decrease in short-term borrowings		(786	)		(9	)
Proceeds from issuance of long-term debt		13			1,294
Repayment of long-term debt		(564	)		(89	)
Proceeds from issuance of common stock under employee stock purchase plan		39			40
Proceeds from issuance of common stock from stock options exercised		94			58
Cash dividend payments		(366	)		(312	)
Repurchase of common stock		(8	)		(1,950	)
Excess tax benefits of share-based payments		1			4
Net cash used in financing activities		(1,577	)		(964	)
Net increase (decrease) in cash and cash equivalents		41			(28	)
Cash and cash equivalents, beginning of period		281			364
Cash and cash equivalents, end of period	$	322		$	336