Lowes Companies, Inc. And The Home Improvement Industry In 2007

Abstract

With the housing boom coming to an end, rising interest rates, and decreasing consumer spending on home improvement products, the home improvement industry is on the brink of change. The industry is seeing increased costs for fuel, raw materials, and lumber in addition to shortages of raw materials. Past years sales growth rates (9.3% in 2005) are expected to slow to 4-5% as the industry reaches maturity. Will Lowes Companies domestic growth strategy be sufficient in the years to come? Robert Niblock, Lowes chief executive expressed confidence in the companys ability to maintain its momentum when he stated, Recent data suggest continued favourable trends in employment levels and income growth which will offset some of the monetary pressures consumers are facing, such as rising fuel prices and interest rates. He also stated, As trends in the housing market normalize from the rapid growth experience over the past few years, we believe we have the programs in place to continue to capture share and deliver solid earnings growth.