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CEO: Lowe's still growing
by Staff
Lowe’s Companies Inc. continues to gain market share and will grow in the long run, despite current economic problems, said Lowe’s Companies Inc. Chairman and Chief Executive Officer Robert A. Niblock during the company’s annual meeting in Charlotte on Friday.
Niblock told about 100 shareholders and employees that Lowe’s is maintaining high standards for stores, diligently managing expenses and continuing a keen focus on customer service as the housing crisis, higher food and fuel costs and other economic problems continue to challenge the company.
Long-term demographic trends for the home improvement industry remain favorable due to population growth and the aging and continuing maintenance needs of over 130 million existing homes in the United States, he added.
“This will cycle through,” he said. At some point in time when there’s a sense out there that housing is bottoming, you’ll have consumers... come in and, particularly in these overheated (housing) markets, say, ‘This is the best house price I’ve seen in the last four or five years.’ The key will be, will they have the available credit in order to be able to act on that desire?”
Niblock also said Lowe’s is starting to see some customers with federal economic-stimulus checks. “We’ll cash them for free, but we are also starting to see purchases coming out of that,” he said.
Lowe’s continued to gain market share, increased total sales and achieved expansion plans by opening 153 new stores, including our first stores in Canada, in 2007. “Further illustrating our unwavering focus on customers, we continued to gain market share through the first quarter of 2008,” said Niblock.
“In a tough environment, great companies look for opportunities to strengthen their business, and that is exactly what Lowe’s is doing,” he said. “We’re committed to taking care of our customers and pursuing profitable long-term market share gains while prudently managing the business to provide the best long-term return for shareholders.
“We’re still a growth company,” he said. “Long term, we still think there’s great opportunity, but we will be evaluating and saying as we go into 2009, ‘How many stores do we think it’s prudent to open given the environment?’“
Niblock said Lowe’s rapid expansion since the mid-1990s and its reputation for cleaner, brighter stores and better customer service helped it post same-store sales generally 3- 5 percent higher than those of Home Depot in recent years. That gap narrowed to 0.8 percent in the first quarter.
He didn’t update the company’s fiscal 2008 guidance, provided on May 19. It calls for earnings in a range of $1.45 to $1.55 a share on 1 percent revenue growth, including a 6-7 percent drop in same-store sales. He reiterated plans to open 120 stores this year despite postponing 20 in the development pipeline.
Also during the meeting, shareholders re-elected board members Robert A. Ingram, Robert L. Johnson and Richard K. Lochridge. Continuing directors include David W. Bernauer, Leonard L. Berry, Peter C. Browning, Dawn E. Hudson, Marshall O. Larsen, Stephen F. Page, O. Temple Sloan Jr. and Niblock.
Shareholders ratified Deloitte & Touche as the company’s independent public accountants for the 2008 fiscal year and approved an amendment to Lowe’s Articles of Incorporation to eliminate the classified structure of the board of directors, including elimination of the supermajority vote requirement to remove directors.
They approved a non-binding shareholder proposal to adopt a simple majority vote requirement for items submitted for shareholder approval. They rejected a non-binding shareholder proposal to require bonuses and long-term compensation be awarded based on company performance compared to that of peer companies.
The board of directors declared a quarterly cash dividend of $0.085 per share, an increase of 6.3 percent, payable on August 1, 2008, to shareholders of record as of July 18, 2008. Lowe’s has paid a cash dividend each quarter sin |
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