THE BUSINESSWEEK 50 RANKINGS + 25

56

Lowe's

Amid a deepening housing slump, Lowe’s hammered out still more profits last year. While archrival Home Depot was beset by management and financial woes, the Mooresville (N.C.) company quietly stuck to its strategy of building cleaner, brighter retail stores in new markets and keeping customers happy with better service. For fiscal 2006, ended Feb. 2, the nation’s second-largest home improvement retailer saw net income jump 12.3%, to $3.1 billion, on sales of $46.9 billion, though both measures slumped in the fourth quarter as the housing slowdown pinched growth. Even so, Lowe’s profitable year was a marked contrast to Home Depot’s, which lost its CEO and reported the first-ever decline in net income in its 29-year history. With no such controversies to distract it, Lowe’s CEO Robert Niblock continued to poke Home Depot in the eye by adding 150 sparkly new stores—often just across the street from its rival’s aging orange boxes.

Overall Grade

A-

Market Data

LOW

Market Value
(2/28/2007)

$49.6 Billion

Profitability*

27.0%

B

Sales Growth Rate**

15.4%

B

12-Month Sales

$46.9 Billion

12-Month Net Income

$3.1 Billion

Total Return Past 12 Months

-4.0%

Past 36 Months

17.7%

Economic SectorConsumer Discretionary
IndustryHome Improvement Retail
The overall sector letter grade reflects how the weighted average of the return on income, or return on equity, and sales growth grades compare with others in the same sector. For the overall grade as well as the ROE/ROI and sales growth grades, an "A" places a company in the top 7% of its sector and an "A-" in the top 14% of the sector. The actual ranking was done using the underlying numerical measures. Grades are for information only.
* For nonfinancial companies, three-year average pretax operating profit before interest and special items as a percentage of average invested capital. For financial companies, pretax profits as a percentage of average shareholder's equity.
*Three-year average annual sales growth based on the most recently reported 36 months, calculated using the least-squares method.

Robert A. Niblock

Robert A. Niblock, 44

CEO since 2005


The BW 50 + 25 Interactive Scoreboard

More BW Stories on Lowe's


More BW50 Profiles






Data as of 2/28/07 provided by Standard & Poor's Compustat