gan to lease more of its own space. In 1989 Lowe's owned 89% of the buildings that housed their stores. In 1998, Lowe’s announced a major expansion into the western United States. The westward move extends its retail reach from coast-to-coast, furthering the company expansion strategy. To speed this goal, Lowe’s acquired Eagle Hardware & Garden, Inc., a Washington based company, which has 32 stores in nine Western States. Lowe’s now has stores in half of the top 25 most populated cities in the United States. In addition to the top 25 markets, Lowe’s planned to open 95 new stores in metro markets growing to 75% of they scheduled 125 new store openings in 2001. Financial HighlightsNet earnings for 1999 increased 34% to $672.8 million or 4.2% of sales compared to $500.4 million or 3.8% of sales for 1998. The company’s sales were $15.9 billion in 1999, a 19% increase over 1998 sales of $13.3 billion. Sales were 20% higher than 1997. The increase in sales is attributable to the company’s ongoing expansion and relocation programs along with growth in store sales. Store sales increases are driven by focusing on commercial business, special order, and installed sales, which is combined with continued strategy of employing an expanded inventory assortment, competitive prices and an emphasis on customer service. Gross Margin in 1999 was 27.5% of sales compared to 26.8% in 1998. Both of these years showed improvement over the 26.6% achieved in 1997. In addition, and increase in the level of controls relating to inventory shrinkage also contributed to gross margin improvements in 1999. Lower product costs, careful/ competitive pricing strategy, and changes in product mix resulting from the expanded merchandise selection available in larger stores continued to provide margin improvements during 1999 and 1998.Company StrategyProduct Differentiation – view changes as an opportunity for differentiatio...
