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News Release

Lowe’s Announces Highlights Discussed at Its 1999 Investor and Analyst Meeting

-- Lowe’s Changes Inventory Accounting Method from LIFO to FIFO -- -- Reaffirms 1999 Consensus Earnings Estimates -- -- Raises Future EPS Growth Rate Projections --

WILKESBORO, N.C. – Lowe’s Companies, Inc. (NYSE: LOW), the world’s second largest home improvement retailer, announced today a change in its method of determining the cost of inventories from the last-in, first-out (LIFO) method to the first-in, first-out (FIFO) method. Lowe’s is experiencing reduced costs in most product categories due to a combination of better buying, increasing imported products and logistics efficiencies. Therefore, management believes the FIFO method will result in a better measurement of operating results. The change will also aid in financial statement comparability within Lowe’s retail industry segment.

Future earnings releases and financial statements will be restated to present prior periods under the FIFO method in accordance with generally accepted accounting principles. No earnings restatement will be necessary for the current fiscal year ending January 28, 2000 since Lowe’s has not recorded any LIFO adjustment this year. The two prior fiscal years’ diluted earnings per share ended January 29, 1999 and January 30, 1998 will be restated to $1.34 and $1.04, respectively. Management estimates that no LIFO adjustment would have been necessary for fiscal 1999 had the accounting method not been changed.

Management believes many analysts are anticipating $10-15 million in LIFO credits (income) in the last half of 1999 and that such LIFO income is reflected in current consensus estimates. Although the change in accounting method from LIFO to FIFO will eliminate the LIFO income previously anticipated, management reaffirms its expectation of achieving earnings estimates as published by First Call for the remaining quarters of the current year. First Call’s current consensus earnings estimates for the third and fourth quarters are $0.42 and $0.36, respectively.

Management noted that top-line sales growth is projected to be in the 20 percent range over the next few years. In addition, moderate improvements to gross margins and total expense leverage are anticipated over that same period. As a result, management expectations are for future diluted earnings per share growth to be in the 22 to 23 percent range on an annualized basis.

This news release may include “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Although the company believes that comments reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Possible risks and uncertainties regarding these statements include, but are not limited to, the direction of general economic trends, the availability of real estate for expansion and its successful development, fluctuations in prices and availability of commodities, unanticipated increases in competition with home improvement chains, adverse weather conditions that affect sales, not fully realized cost savings from the Eagle merger, and greater than anticipated costs associated with the integration of the two businesses.

Lowe’s Companies, Inc. is the second largest retailer of home improvement products in the world, serving over four million do-it-yourself retail and commercial business customers weekly through 545 stores in 37 states. Headquartered in Wilkesboro, N.C., the 53-year old company employs over 80,000 people. More information on the company is available on Lowe’s web site at