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Lowe’s Sales Rise 14.2%, Earnings Up 30.5%

Mooresville, N.C. — Surviving the challenges created by what it called “an unusually cold, wet March in many parts of the country,” home-improvement retailer Lowe’s posted a 14.2 percent sales increase during its fiscal first quarter, reaching $9.9 billion, up from $8.7 billion in the year-ago period. Comp-store sales increased 3.8 percent.

Lowe’s recorded net earnings of $590 million in the three months, ended April 29, a 30.5 percent jump over the $452 million registered in the first quarter of 2004.

Gross margin in the first quarter climbed to 34.5 percent, compared with a year-earlier 33.1 percent. Expenses for the three months, however, rose to 21.6 percent, from 21.4 percent in the first three months of last year.

Operating margin in the second fiscal quarter is expected to be about flat as a percentage to sales, and should increase less than one-fifth of a percentage point for the fiscal year.

“We achieved high single-digit comparable-store sales in February and April,” said Robert Niblock, chairman/CEO, “but they were offset by negative low single-digit comps in weather-affected March. We continue to make investments in new stores, improve existing stores and build the infrastructure to facilitate our expansion,” he said.

Niblock reported that installed sales, special-order sales and commercial business customers “continue to drive our comparable-store sales momentum.”

During the first quarter, Lowe’s opened 27 new stores, including two relocations. As of April 29, the chain operated 1,112 stores in 48 states.

Lowe’s expects to open an additional 27 locations in its second fiscal quarter, reflecting a 14 percent increase in square footage, and is shooting for 150 store openings in fiscal 2005, or about a 13 percent to 14 percent rise in square footage.