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News Release

Lowe's Reports Record First Quarter Earnings

-- Net Earnings Increased 20 Percent to $225 million --

-- Diluted Earnings Per Share Increased 18 Percent to $0.58 --

-- First Quarter Sales Increased 18 Percent --

WILKESBORO, N.C., May 21 -- Lowe's Companies, Inc. (NYSE: LOW), the world's second largest home improvement retailer, today reported net earnings of $225.3 million for the quarter ended May 4, 2001, a 20.4 percent increase over the same period a year ago. Diluted earnings per share increased 18.4 percent to $0.58 from $0.49 in the first quarter of 2000.

Sales for the quarter increased 18.1 percent to $5.28 billion, up from $4.47 billion in the first quarter of 2000. Comparable store sales for the first quarter decreased by 3.0 percent and were negatively impacted by deflation in lumber and building materials by approximately 100 basis points.

"Lowe's successfully focused on the fundamentals during the quarter to produce earnings per share results at the high end of our guidance," explained Robert L. Tillman, Lowe's chairman and CEO. "We continued investing in our future by opening a record number of first quarter stores and a sixth regional distribution center. Despite these investments, a slowing economy and a competitive retail environment, we expanded operating margins and gained considerable leverage by carefully controlling expenses."

"The recent activity by the Federal Reserve suggests its continued willingness to stimulate the economy," added Tillman. "We expect the five interest rate cuts since the beginning of the year to begin to positively influence consumer spending in the coming months, and we approach the balance of the year with cautious optimism as reflected in our Lowe's Business Outlook."

During the quarter, Lowe's opened 37 new stores, including five relocations of older, smaller stores. Two older, smaller stores were closed. At the end of the first quarter, Lowe's operated 680 stores in 40 states representing 71.9 million square feet, a 22.8% increase over last year.

A conference call to discuss first quarter 2001 operating results is scheduled for today (Monday, May 21) at 9:00 a.m. EST. Please dial 719-457-2633 (confirmation code 767819) 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, Investor Information, Earnings Releases. A replay of the call will be archived on www.lowes.com for 48 hours.

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.

Second Quarter 2001 (comparisons to second quarter 2000)

  • The company expects to open 20 to 25 stores in the second quarter
  • Total sales are expected to increase approximately 15 percent for the quarter ending August 3, 2001
  • The company expects to report flattish comparable store sales
  • Gross margin is expected to improve 40 to 50 basis points in the second quarter of 2001
  • The company expects SG&A expense to de-leverage by 10 to 20 basis points as a percent of sales on a year over year comparison
  • Store opening costs are expected to be approximately $30 to $35 million
  • Total expense de-leverage of approximately 45 to 55 basis points is expected
  • Diluted earnings per share of $0.80 to $0.82 are expected for the second quarter
  • Lowe's second quarter ends on August 3, 2001 with operating results to be publicly released on Monday, August 20, 2001

Fiscal Year 2001 (comparisons to fiscal year 2000)

  • * The company expects to open 115 stores in 2001 reflecting total 2001 square footage growth of 19 percent
  • Total sales are expected to increase approximately 17 to 18 percent for the 52 weeks in 2001 versus the 53 weeks in 2000
  • The company expects to report a comparable store sales increase of approximately 2 percent
  • Gross margin is expected to improve 20 to 30 basis points
  • Operating margin, defined as pre-tax earnings plus store opening costs and interest expense, is expected to increase by 20 to 30 basis points
  • Diluted earnings per share of $2.45 to $2.48 are expected for the fiscal year ending February 1, 2002

This news release 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. Possible risks and uncertainties regarding these statements include, but are not limited to, the direction of general economic trends, as Lowe's expands into major metropolitan markets, the availability of real estate for expansion and its successful development may lengthen the timelines for store openings, the availability of sufficient labor to facilitate growth, fluctuations in prices and availability of product, unanticipated increases in competition and weather conditions that affect sales.

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. With over 100,000 employees, Lowe's is 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.