Lowe's Companies Inc LOW
Q3 2012 Earnings Call Transcript

Transcript Call Date 11/19/2012

Operator: Good morning, everyone, and welcome to the Lowe's Companies' Third Quarter 2012 Earnings Conference Call. This call is being recorded.

Statements made during this call will include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Management's expectations and opinions reflected in those statements are subject to risks and the Company can give no assurance that they will prove to be correct. Those risks are described in the Company's earnings release and in its filings with the Securities and Exchange Commission.

Also, during this call, management will be using certain non-GAAP financial measures. You can find a reconciliation to the most directly comparable GAAP financial measures and other information about them posted on Lowe's Investor Relations website under Investor Documents.

Hosting today's conference will be Mr. Robert Niblock, Chairman, President and CEO; Mr. Greg Bridgeford, Chief Customer Officer; and Mr. Bob Hull, Chief Financial Officer.

I will now turn the program over to Mr. Niblock for opening remarks. Please go ahead, sir.

Robert A. Niblock - Chairman, President and CEO: Good morning, and thanks for your interest in Lowe's. Following my remarks, Greg Bridgeford will review our operational performance and Bob Hull will review our financial results in detail. But first, let me express our sympathy for all those impacted by the devastating effects of super storm Sandy. I also want to express my sincere appreciation for the Lowe's team members who have worked so diligently to get supplies to the affected area both before and after the storm and for those who are working diligently to staff and support our stores as we communities recover from the damage.

While roughly 200 of our stores were in the affected area, we only had one store that remained closed for an extended period of time due to severe water damage. That store in Rosedale, New York reopened last Wednesday and stands ready to assist the community.

As we've done in the past, when natural disaster strikes Lowe's stores around the country as well as become official donation sites for the American Red Cross Disaster Relief Fund. Lowe's is contributing $1 million to the relief efforts through the American Red Cross and other partner organizations.

Turn now to our operating performance. We are keenly focused on improving our core business. In the U.S., we are focused on two large bodies of work this year; value improvement and product differentiation. Together they will enable us to compete more effectively in the current macroeconomic environment. These focus areas build on those core strengths and are expect to deliver comp transaction growth and better gross margins by localizing assortments, driving excitement in our stores to better display techniques and managing an appropriate balance of product cost and retail pricing. We continue to make progress and are encouraged by early results. By mid-2013 we will have completed this work and expect these efforts to provide meaningful comp and gross margin benefits. As I've said, we are focused and our level of execution is improving.

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