<PAGE> -1-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended October 30, 1998
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
Commission file number 1-7898
LOWE'S COMPANIES, INC.
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-0578072
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. BOX 1111, NORTH WILKESBORO, N.C. 28656
(Address of principal executive offices)
(Zip Code)
(336) 658-4000
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No .
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class ____________ Outstanding at November 27, 1998
Common Stock, $.50 par value 352,694,298
13
TOTAL PAGES
<PAGE> -2-
LOWE'S COMPANIES, INC.
- INDEX -
Page No.
PART I - Financial Information:
Consolidated Balance Sheets - October 30, 1998,
October 31, 1997 and January 30, 1998 3
Consolidated Statements of Current and
Retained Earnings - quarter and nine months
ended October 30, 1998 and October 31, 1997 4
Consolidated Statements of Cash Flows - nine
months ended October 30, 1998 and October 31, 1997 5
Notes to Consolidated Financial Statements. 6-7
Management's Discussion and Analysis of Results
of Operations and Financial Condition 8-11
Independent Accountants' Report 12
PART II - Other Information 13
Item 6 (b) - Reports on Form 8-K
<PAGE> -3-
Lowe's Companies, Inc.
Consolidated Balance Sheets
In Thousands
<TABLE>
<CAPTION>
October 30, October 31, January 30,
1998 1997 1998
<S> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $317,032 $28,539 $195,146
Short-term investments 36,190 81,682 16,155
Accounts receivable - net 159,877 144,635 118,408
Merchandise inventory 2,203,168 1,907,188 1,714,592
Deferred income taxes 41,228 24,337 34,116
Other assets 68,749 40,702 31,185
Total current assets 2,826,244 2,227,083 2,109,602
Property, less
accumulated depreciation 3,437,723 2,867,989 3,005,199
Long-term investments 34,065 34,758 35,161
Other assets 75,677 43,622 69,315
Total assets $6,373,709 $5,173,452 $5,219,277
Liabilities and Shareholders' Equity
Current liabilities:
Short-term borrowings $93,975 $84,866 $98,104
Current maturities
of long-term debt 57,833 12,240 12,478
Accounts payable 1,267,425 990,735 969,777
Employee retirement plans 54,960 49,486 64,669
Accrued salaries and wages 119,510 97,209 83,377
Other current liabilities 319,485 243,014 220,915
Total current liabilities 1,913,188 1,477,550 1,449,320
Long-term debt, excluding
current maturities 1,302,343 1,049,898 1,045,570
Deferred income taxes 130,001 110,205 123,778
Total liabilities 3,345,532 2,637,653 2,618,668
Shareholders' equity
Preferred stock -
$5 par value, none issued - - -
Common stock -
$.50 par value;
Issued and Outstanding
October 30, 1998 352,679
October 31, 1997 349,804
January 30, 1998 350,632 176,339 174,902 175,316
Capital in excess of par 975,865 872,098 892,666
Retained earnings 1,910,699 1,502,212 1,565,133
Unearned compensation-
restricted stock awards (35,083) (13,480) (32,694)
Accumulated other
comprehensive income -
unrealized gain on
available-for-sale securities 357 67 188
Total shareholders' equity 3,028,177 2,535,799 2,600,609
Total liabilities and
shareholders' equity $6,373,709 $5,173,452 $5,219,277
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> -4-
Lowe's Companies, Inc.
Consolidated Statements of Current and Retained Earnings
In Thousands, Except Per Share Data
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
October 30, 1998 October 31, 1997 October 30, 1998 October 31, 1997
Current Earnings Amount Percent Amount Percent Amount Percent Amount Percent
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $3,003,993 100.00 $2,530,481 100.00 $9,329,218 100.00 $7,739,321 100.00
Cost of sales 2,191,674 72.96 1,859,595 73.49 6,853,825 73.47 5,713,639 73.83
Gross margin 812,319 27.04 670,886 26.51 2,475,393 26.53 2,025,682 26.17
Expenses:
Selling, general
and administrative 522,723 17.40 435,765 17.22 1,583,962 16.98 1,314,550 16.98
Store opening costs 20,345 0.68 22,671 0.90 46,663 0.50 43,211 0.56
Depreciation 68,660 2.29 60,546 2.39 199,665 2.14 175,827 2.27
Interest 18,024 0.60 15,046 0.59 54,934 0.59 48,336 0.63
Total expenses 629,752 20.97 534,028 21.10 1,885,224 20.21 1,581,924 20.44
Pre-tax earnings 182,567 6.07 136,858 5.41 590,169 6.32 443,758 5.73
Income tax provision 66,200 2.20 48,759 1.93 213,959 2.29 158,781 2.05
Net earnings $116,367 3.87 $88,099 3.48 $376,210 4.03 $284,977 3.68
Shares outstanding
(weighted average) 352,627 349,389 351,884 348,134
Basic Earnings Per Share $0.33 $0.25 $1.07 $0.82
Diluted Earnings Per Share $0.33 $0.25 $1.06 $0.82
Retained Earnings
Balance at beginning
of period $1,804,856 $1,423,699 $1,565,133 $1,245,888
Net earnings 116,367 88,099 376,210 284,977
Cash dividends (10,524) (9,586) (30,644) (28,653)
Balance at end of period $1,910,699 $1,502,212 $1,910,699 $1,502,212
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> -5-
Lowe's Companies, Inc.
Consolidated Statements of Cash Flows
In Thousands
<TABLE>
<CAPTION>
For the Nine Months Ended
October 30, October 31,
1998 1997
<S> <C> <C>
Cash Flows From Operating Activities:
Net Earnings $376,210 $284,977
Adjustments to Reconcile Net
Earnings to Net Cash Provided By
Operating Activities:
Depreciation 199,665 175,827
Amortization of Original Issue Discount 330 112
Increase (Decrease) in Deferred Income Taxes (997) 12,862
Loss on Disposition/Writedown of
Fixed and Other Assets 16,163 15,186
Changes in Operating Assets and Liabilities:
Accounts Receivable - Net (41,469) (27,073)
Merchandise Inventory (488,576) (301,308)
Other Operating Assets (37,407) (11,814)
Accounts Payable 297,648 76,568
Employee Retirement Plans 50,449 45,352
Other Operating Liabilities 157,745 74,910
Net Cash Provided by Operating Activities 529,761 345,599
Cash Flows from Investing Activities:
Net Increase in Short-Term Investments (2,774) (39,956)
Purchases of Long-Term Investments (16,489) (12,311)
Proceeds from Sale/Maturity of
Long-Term Investments 602 2,172
Increase in Other Long-Term Assets (12,191) (2,197)
Fixed Assets Acquired (643,335) (538,235)
Proceeds from the Sale of Fixed
and Other Long-Term Assets 18,429 18,986
Net Cash Used in Investing Activities (655,758) (571,541)
Cash Flows from Financing Activities:
Long-Term Debt Borrowings 296,159 265,743
Net Increase (Decrease) in
Short-Term Borrowings (4,129) 3,961
Proceeds from Stock Options Exercised 8,219 145
Repayment of Long-Term Debt (12,136) (27,102)
Cash Dividend Payments (40,230) (28,653)
Net Cash Provided by Financing Activities 247,883 214,094
Net Increase (Decrease) in
Cash and Cash Equivalents 121,886 (11,848)
Cash and Cash Equivalents, Beginning of Year 195,146 40,387
Cash and Cash Equivalents, End of Period $317,032 $28,539
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> -6-
Lowe's Companies, Inc.
Notes to Consolidated Financial Statements
Note 1: The accompanying Consolidated Financial Statements (unaudited)
Have been reviewed by an independent certified public accountant, and in the
opinion of management, they contain all adjustments necessary to present
fairly the financial position as of October 30, 1998 and October 31, 1997, and
the results of operations for the quarters and nine months ended October 30,
1998 and October 31, 1997, and the cash flows for the nine months ended
October 30, 1998 and October 31, 1997.
These interim financial statements should be read in conjunction with the
financial statements and notes thereto, included in the Company's Annual
Report on Form 10-K for the fiscal year ended January 30, 1998.
On May 29, 1998, the Board of Directors declared a two-for-one stock split on
the Company's common stock. One additional share was issued on June 26, 1998
for each share held by shareholders of record on June 12, 1998. Par value
remained unchanged at $.50 and approximately $88.0 million was transferred to
common stock from capital in excess of par as of the record date. The
accompanying Consolidated Financial Statements, including per share data, have
been adjusted to reflect the effect of the stock split.
Diluted earnings per share are calculated on the weighted average shares of
common stock adjusted for the dilutive effects of stock options outstanding
at the balance sheet date. The dilutive effects of stock options were
incremental shares of 1,431,000 and 136,000 for the quarters ended October 30,
1998 and October 31, 1997, respectively and 1,573,000 and 135,000 for the nine
months ended October 30, 1998 and October 31, 1997, respectively. Weighted
average shares outstanding, as adjusted for dilution, were 354,058,000 and
349,525,000 for the quarters ended October 30, 1998 and October 31, 1997,
respectively, and 353,457,000 and 348,269,000 for the nine months ended
October 30, 1998 and October 31, 1997, respectively.
Note 2: The Company has a cash management program which provides for the
investment of excess cash balances in financial instruments which have
maturities of up to five years. Investments with original maturities of three
months or less when purchased are classified as cash equivalents. Investments
with a maturity of between three months and one year from the balance sheet
date are classified as short-term investments. Investments with maturities
greater than one year are classified as long-term.
Note 3: Net interest expense is composed of the following (in thousands):
<TABLE>
<CAPTION>
Quarter ended Nine months ended
October 30, October 31, October 30, October 31,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Long-term debt $16,030 $ 9,217 $47,559 $24,102
Capitalized leases 9,629 9,211 29,307 29,135
Short-term debt 1,382 1,314 4,197 6,372
Amortization of loan cost 187 169 581 373
Interest income (5,146) (2,183) (16,740) (5,870)
Interest capitalized on
construction in progress (4,058) (2,682) (9,970) (5,776)
Net interest expense $18,024 $15,046 $54,934 $48,336
</TABLE>
<PAGE> -7-
Note 4: Inventory is stated at the lower of cost or market using the last-
in, first-out inventory accounting method. If the first-in, first out method
of inventory accounting had been used, inventories would have been $56.5
million higher at October 30, 1998, $80.1 million higher at October 31, 1997
and $67.6 million higher at January 30, 1998.
Note 5: Property is shown net of accumulated depreciation of $946.8 million
at October 30, 1998, $758.6 million at October 31, 1997 and $789.8 million at
January 30, 1998.
Note 6: Supplemental disclosures of cash flow information (in thousands):
<TABLE>
<CAPTION>
Nine months ended
October 30, 1998 October 31, 1997
<S> <C> <C>
Cash paid for interest
(net of capitalized) $ 85,186 $ 60,269
Cash paid for income taxes 193,148 145,945
Non-cash investing and financing
activities:
Common stock issued to ESOP 60,158 56,636
Fixed assets acquired under
capital lease 24,822 33,481
</TABLE>
Note 7: In January 1998, the Board of Directors authorized the funding of
the Fiscal 1997 ESOP contribution primarily with the issuance of new shares of
the Company's common stock. During the first nine months of Fiscal 1998, the
Company issued the post-split equivalent of 1,651,610 shares, with a market
value of $60.4 million.
Note 8: In February 1998, the Company issued $300 million of 6.875%
Debentures due February 2028. The debentures were issued at an original price
of $987.20 per $1,000 principal amount, which represented an original issue
discount of .405% payable at maturity and an underwriters' discount of .875%.
The debentures may not be redeemed prior to maturity.
Note 9: Total comprehensive income, comprised of net earnings and unrealized
holding gains (losses) on available-for-sale securities, was $116.6 and $88.1
million for the quarters ended October 30, 1998 and October 31, 1997,
respectively, and $376.4 and $285.4 million for the nine months ended October
30, 1998 and October 31, 1997, respectively.
Note 10: On November 25, 1998, the Company filed a Form 8-K Current Report
describing its intent to merge with Eagle Hardware & Garden, Inc. (Eagle). In
November 1998, the Company entered into a definitive agreement to acquire
Eagle in a stock-for-stock merger transaction, which is expected to be
completed during the first quarter of 1999. The transaction, which is valued
at approximately $1 billion, is subject to customary closing conditions. The
merger is structured as a tax-free exchange of the companies' common stock,
and will be accounted for as a pooling of interests.
<PAGE> -8-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
This discussion should be read in conjunction with the financial statements
and notes thereto included in the Company's Form 10-K for the fiscal year
ended January 30, 1998.
For the third quarter of fiscal 1998, sales increased 19% to $3.0 billion,
comparable store sales increased 4.4% and net earnings rose 32% to $116.4
million compared to last year's third quarter results. Net earnings
calculated on a FIFO basis would show an increase in FIFO earnings of 26%.
For the large store group (more than 80,000 square feet), comparable store
sales increased 5.0% compared to last year's third quarter. Diluted earnings
per share were $.33 compared to $.25 for the comparable quarter of last year.
For the nine months ended October 30, 1998, sales increased 21% to $9.3
billion, net earnings increased 32% to $376.2 million and diluted earnings per
share were $1.06 compared to $.82 in the first nine months of fiscal 1997.
Comparable store sales increased 5.2% year-to-date, while comparable sales for
the large store group increased 6.6%.
The sales increase in the third quarter was attributable to the 6.5 million
square feet of retail selling space at new and relocated stores added since
last year's third quarter and the 4.4% comparable store sales gain. Sales in
the Company's core businesses performed well for the quarter offset by weaker
sales in the weather sensitive categories such as lawn and garden. The
Company experienced strong sales increases in tools, appliances, kitchen
cabinets and home decor categories.
Gross margin was 27.04% of sales for the quarter ended October 30, 1998
compared to 26.51% for last year's comparable quarter. Of the 53 basis point
increase in gross margin rate, 27 basis points were due to favorable changes
in product mix and ongoing store pricing disciplines. The other 26 basis
points were due to deflation in inventory costs resulting in a LIFO credit of
$8.1 million in this year's third quarter compared to a credit of $.1 million
in last year's third quarter. Gross margin for the nine months ended October
30, 1998 was 26.53% versus 26.17% last year. The 36 basis point increase in
gross margin rate primarily consisted of 25 basis points related to favorable
changes in product mix and continuing store pricing disciplines and 19 basis
points resulting from a LIFO credit of $11.1 million for the first nine months
of fiscal 1998 compared to a LIFO charge of $5.5 million for the comparable
period last year.
Selling, general and administrative expenses (SG&A) were 17.40% of sales
versus 17.22% in last year's third quarter. SG&A increased by 20% compared to
the 19% increase in sales for the quarter. Store payroll increased as a
percent of sales as a result of the Company's sales falling below planned
levels for the quarter. SG&A expenses were held below planned levels for the
quarter but did not leverage as a percentage of sales. SG&A expenses were
16.98% of sales for the nine months ended October 30, 1998 and October 31,
1997.
<PAGE> -9-
Store opening costs were $20.3 million for the quarter ended October 30,
1998 compared to $22.7 million last year, representing costs associated with
the opening of 16 stores during the current year's third quarter (10 new and 6
relocated) compared to 19 stores for the comparable period last year (12 new
and 7 relocated). Charges in this quarter for future and prior openings were
$7.5 million compared to $7.6 million in last year's third quarter. For the
nine months ended October 30, 1998, store opening costs were $46.7 million
versus $43.2 million last year, representing costs associated with the opening
of 40 stores this year (25 new and 15 relocated) compared to 36 stores in the
comparable period last year (22 new and 14 relocated). The Company's 1998
expansion plans are discussed under "Liquidity and Capital Resources" below.
Depreciation was $68.7 million for the quarter ended October 30, 1998 and
$199.7 million for the nine months then ended. This is an increase of 13.4%
and 13.6% over the respective comparable periods last year. The increase is
due primarily to additions of buildings, fixtures, displays and computer
equipment relating to the Company's expansion program.
Interest expense increased by $3.0 and $6.6 million to $18.0 and $54.9
million for the third quarter and nine months ended October 30, 1998,
respectively. Interest has increased primarily due to interest expense on
medium-term notes and debentures issued during the last fifteen months.
The Company's effective income tax rate was 36.26% for the quarter ended
October 30, 1998 and 35.63% for last year's third quarter. The effective rate
was 36.25% compared to 35.78% for the nine months ended October 30, 1998 and
October 31, 1997, respectively. The higher rates in 1998 are primarily
related to expansion into states with higher income tax rates.
LIQUIDITY AND CAPITAL RESOURCES
Primary sources of liquidity are cash flows from operating activities and
certain financing activities. Net cash provided by operating activities was
$530 million for the nine months ended October 30, 1998 compared to $346
million for the first nine months of fiscal 1997. The $184 million increase
in the current year resulted primarily from increased earnings, increased
operating liabilities due to payment timing and smaller increases in inventory
net of accounts payable. The Company's working capital was $913 million at
October 30, 1998 compared to $750 million at October 31, 1997 and $660 million
at January 30, 1998.
The primary component of net cash used in investing activities continues to
be new store facilities in connection with the Company's expansion plan. Cash
acquisitions of fixed assets were $643 million and $538 million for the nine
months ended October 30, 1998 and October 31, 1997, respectively. At October
30, 1998, the Company had 465 stores in 26 states and 40.2 million square feet
of retail selling space, a 19.3% increase over the selling space as of October
31, 1997.
Cash flows provided by financing activities were $248 million for the nine
months ended October 30, 1998 compared to $214 million for the nine months
ended October 31, 1997. Net proceeds from borrowings (long-term and short-
term) were $292 million for the first nine months of fiscal 1998 versus $270
million for the comparable period last year. In February 1998, the Company
issued $300 million principal amount of 6.875% Debentures due February 15,
2028. The debentures may not be redeemed prior to maturity.
<PAGE> -10-
Property has increased as a result of the Company's plan to continue
expansion of retail sales floor square footage by expanding into new markets
and relocating from older, smaller stores to larger stores. The Company's
1998 capital budget is approximately $1.4 billion, inclusive of approximately
$400 million in operating or capital leases. More than 80% of this planned
commitment is for store expansion. Expansion plans for 1998 consist of
approximately 75 to 80 new stores with about 60% in new markets and the
balance being relocations of existing stores, the combination of which will
increase retail selling space by approximately 20%. Approximately 30% of the
1998 projects will be leased and 70% will be owned. Expansion in the first
nine months of fiscal 1998 included 25 new stores and 15 relocations
representing 3.7 million square feet of new incremental retail space.
The Company believes that funds from operations, funds from debt issuances,
leases and existing credit agreements will be adequate to finance the 1998
expansion plan and other operating needs.
As discussed in the annual report for the year ending January 30, 1998, the
Company's major market risk exposure is the potential loss arising from
changing interest rates and its impact on long-term investments and long-term
debt. The Company's policy is to manage interest rate risks by maintaining a
combination of fixed and variable rate financial instruments. The risks
associated with long-term investments at October 30, 1998 have not changed
materially since January 30, 1998. Long-term debt has increased primarily due
to the issuance of $300 million principal amount of 6.875% Debentures due
February 15, 2028. Disclosures of the Company's principal cash outflows for
long-term debt and related interest rates have changed since January 30, 1998
due to the new fixed rate debt.
Year 2000
The "Year 2000 Problem" arose because many existing computer programs use
only the last two digits to refer to a year. If not addressed, computer
programs that are date sensitive may not have the ability to properly
recognize dates in year 2000 and beyond. The result could be a disruption of
operations and the processing of transactions. The Company has completed an
analysis of the impact and costs relating to the Year 2000 Problem and has
developed an implementation plan to address the issue. The implementation
plan is scheduled to be substantially complete by the end of 1998, with
continued testing of compliance throughout 1999. Additionally, the Company
has sent year 2000 questionnaires to merchandise vendors and other entities
with which the Company conducts business in order to assess whether they are
year 2000 compliant or have adequately addressed their system conversion
requirements. The Company cannot predict how many, if any, of the responses
it receives may prove later to be inaccurate or overly optimistic. To address
this uncertainty, the Company has begun developing contingency plans to
address unanticipated interruptions or down time in both the Company's and
third parties' systems and services. Contracted programming costs to convert
the Company's systems over 1997, 1998 and 1999 are estimated to be
approximately $5 million and are being expensed as incurred. In addition,
approximately $19 million of computer hardware is being purchased to replace
noncompliant computer hardware. The cost of the computer hardware is being
capitalized and depreciated over useful lives ranging from 3 to 5 years. The
total cost to convert systems has been mitigated by the substantial investment
in new computer systems over the past six years. During this period, new
computer systems have been developed or purchased including but not limited to
these applications: Distribution, Electronic Data Interchange, Payroll and
Human Resources, General Ledger, Accounts Payable, Forecasting and
Replenishment and Supply Services. All of these new systems are "2000
Compliant". As of October 30, 1998 the Company is more than 75% complete with
its implementation plan. The Company is continuing to closely monitor
adherence to the implementation plan and is currently satisfied that it will
be adequately completed in the scheduled time frame. If the Company
encounters unforeseen complications or issues not previously addressed in the
comprehensive plan, additional resources from internal and external sources
<PAGE> -11-
would be committed to complete the necessary conversions in the required time
frame. Since the use of these additional resources is considered unlikely, no
estimates as to the costs of them have been made at this time.
FORWARD-LOOKING STATEMENTS
This Securities and Exchange Commission Form 10-Q may include "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 the
expectations reflected in such forward-looking statements are reasonable, it
can give no assurance that such expectations will prove to be correct.
Important factors that could cause actual results to differ from expectations
include, but are not limited to, general economic trends, availability and
development of real estate for expansion, commodity markets, and the nature of
competition and weather conditions, all which are described in detail in the
Company's 1997 Annual Report.
<PAGE> -12-
INDEPENDENT ACCOUNTANTS' REPORT
The Board of Directors
Lowe's Companies, Inc.
North Wilkesboro, North Carolina:
We have reviewed the accompanying consolidated balance sheet of Lowe's
Companies, Inc. and subsidiary companies as of October 30, 1998, and the
related consolidated statements of current and retained earnings for the
quarter and nine months ended October 30, 1998 and October 31, 1997, and of
cash flows for the nine months ended October 30, 1998 and October 31, 1997.
These financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and of making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to such consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Lowe's Companies, Inc. and
subsidiary companies as of January 30, 1998, and the related consolidated
statements of earnings, shareholders' equity, and cash flows for the year then
ended (not presented herein); and in our report dated February 19, 1998, we
expressed an unqualified opinion on those consolidated financial statements.
In our opinion, the information set forth in the accompanying consolidated
balance sheet as of January 30, 1998 is fairly stated, in all material
respects, in relation to the consolidated balance sheet from which it has been
derived.
/s/ Deloitte & Touche LLP
Charlotte, North Carolina
November 10, 1998
<PAGE> -13-
Part II - OTHER INFORMATION
Item 6 (b) - Reports on Form 8-K
A report on Form 8-K was filed on October 9, 1998 by the registrant.
Therein under Item 5, the Company filed a summary and certain exhibits
in connection with the Company's Rights Agreement concerning
Participating Cumulative Preferred Stock, Series A.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LOWE'S COMPANIES, INC.
December 10, 1998 /s/ Kenneth W. Black, Jr.
Date __________________ __________________________________________
Kenneth W. Black, Jr.
Vice President and Corporate Controller
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-29-1999
<PERIOD-END> OCT-30-1998
<CASH> 317,032
<SECURITIES> 36,190
<RECEIVABLES> 159,877
<ALLOWANCES> 0
<INVENTORY> 2,203,168
<CURRENT-ASSETS> 2,826,244
<PP&E> 3,437,723
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,373,709
<CURRENT-LIABILITIES> 1,913,188
<BONDS> 0
0
0
<COMMON> 176,339
<OTHER-SE> 2,851,838
<TOTAL-LIABILITY-AND-EQUITY> 6,373,709
<SALES> 9,329,218
<TOTAL-REVENUES> 9,329,218
<CGS> 6,853,825
<TOTAL-COSTS> 6,853,825
<OTHER-EXPENSES> 1,830,290
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 54,934
<INCOME-PRETAX> 590,169
<INCOME-TAX> 213,959
<INCOME-CONTINUING> 376,210
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 376,210
<EPS-PRIMARY> 1.07
<EPS-DILUTED> 1.06
</TABLE>
