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News Release

Lowe's Updates Business Outlook for Fourth Quarter

-- Revises 4Q00 Earnings Per Share Estimates --

-- Projects 2001 EPS to Increase 20 to 22 Percent--

-- Revises 4Q00 Earnings Per Share Estimates --

-- Projects 2001 EPS to Increase 20 to 22 Percent--

WILKESBORO, N.C. – Lowe’s Companies, Inc. (NYSE: LOW), the world’s second largest home improvement retailer, said today it expects comparable store sales results to be below the company’s prior guidance of 13 percent. As a result of weaker sales, earnings per share for the fourth quarter of 2000 are expected to be between $0.40 and $0.42. Details of the revised guidance are provided below in the section entitled Lowe’s Business Outlook.

"It is clear that softer sales trends will be difficult to overcome over the balance of the quarter," commented Robert L. Tillman, Lowe's chairman and CEO. "With the exception of our appliance business, we have seen a slowdown – relative to our year-to-date trends – across the balance of our other product offerings. Therefore we predict total sales in the fourth quarter to approximate $4.5 billion, a 19 percent increase over the fourth quarter of 1999."

Looking forward to 2001, the company projects earnings per share to grow approximately 20 to 22 percent, as compared to the previously indicated 22 to 23 percent growth. The revised projections are the result of an economic slow-down affecting retailers in all sectors. Tillman explained, “Without a clear indication about where the economy is heading, we find it prudent to revise earnings expectations for 2001.

“Despite concerns over economic conditions, we do see opportunities to capture additional market share as the competitive landscape continues to change within our industry. Coupled with our aggressive expansion program and sales associates’ enthusiasm, fiscal 2001 should be a record year.”

A conference call is scheduled for today (Monday, December 11, 2000) at 9:00 a.m. EST. Please dial 913-981-5509 (confirmation code 692813) to participate. A webcast of the call will take place simultaneously and can be accessed by visiting Lowe's website at www.lowes.com and clicking on About Lowe’s and then Investor Information. A replay of the conference call will be available beginning at 12:00 noon on December 11, 2000 until December 12, 2000, at 12:00 midnight. Please dial 719-457-0820 to listen. A webcast replay of the call will be archived on www.lowes.com for 48 hours.

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, the availability of sufficient labor to facilitate growth, 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 world’s second largest home improvement retailer. Headquartered in Wilkesboro, N.C., Lowe’s is the 15th largest retailer in the U.S. as well as the 34th largest retailer worldwide. Lowe’s and its 100,000 employees are Improving Home Improvement for nearly five million do-it-yourself retail and commercial business customers each week. For more information, or product, visit or shop us at lowes.com.

Lowe's Business Outlook

This outlook is based on current expectations and includes "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.

Fourth Quarter 2000 (comparisons to fourth quarter 1999)

  • The company expects to complete the quarter and fiscal year 2000 with approximately 650 stores in 40 states

  • A total sales increase of approximately 19 percent is expected for the 14 weeks ended February 2, 2001 compared to the 13 weeks ended January 28, 2000

  • The company expects to report a comparable store sales decrease of 2 to 4 percent for the 14 weeks ended February 2, 2001 compared against the 14 weeks ended February 4, 2000

  • Gross margin is expected to decline 25 to 35 basis points on a year over year basis

  • SG&A expenses are expected to de-leverage 50 to 60 basis points as a percent of sales on a year over year comparison

  • Total expense de-leverage of approximately 60 to 70 basis points is expected

  • Diluted earnings per share of $0.40 to $0.42 for the quarter ending February 2, 2001 are expected

  • Lowe's fiscal year and fourth quarter ends on February 2, 2001 with operating results to be publicly released on Monday, February 26, 2001

Outlook for 2001

  • The company expects total sales growth of 18 – 20 percent in 2001 reflecting a 52 week year in 2001 compared to a 53 week year in 2000

  • Square footage is expected to increase 18 to 20 percent

  • 2001 expansion plans call for 115 to 125 new stores, including 15 to 20 store relocations

  • A comparable store sales increase of 3 to 5 percent is expected

  • Annual gross margin improvements of 20 to 25 basis points are expected

  • Operating margins should increase by 25 to 30 basis points

  • Earnings per share are expected to increase 20 to 22 percent

Outlook for 2002 - 2003

  • The company expects total sales growth of approximately 20 percent per year

  • Square footage is expected to increase 18 to 20 percent per year

  • A comparable store sales increase of 4 to 6 percent is expected

  • Annual gross margin improvements of 20 to 25 basis points are expected

  • Operating margins should increase by 25 to 30 basis points per year

  • Earnings per share are expected to increase 20 to 22 percent annually