Sales for the quarter increased 3.2 percent to $11.6 billion, up from $11.2 billion in the third quarter of 2006. For the nine months ended November 2, sales increased 3.8 percent to $37.9 billion. Comparable store sales declined 4.3 percent for both the third quarter and first nine months of 2007.

“Many external factors contributed to the weak sales environment, including a continuing housing correction, drought conditions in several U.S. markets, and slower than expected sales in Gulf Coast markets,?EUR??,,????'?? said Robert A. Niblock, Lowe’s chairman and CEO. ?EUR??,,????'??Clearly the largest of these impacts was the unstable housing environment evidenced by an even steeper decline in housing turnover, falling home prices in many markets, and a near record inventory of homes for sale. Despite these factors, Lowe’s continues to gain market share according to third party estimates.?EUR??,,????'??

“The home improvement consumer remains pressured by the ongoing housing correction, tighter credit standards in the mortgage market, and rising financial obligations, but we believe our guidance for the fourth quarter reflects these factors and is appropriately conservative given the uncertainties that exist,” Niblock concluded. “Pressures on our industry are likely to continue well into 2008, but we remain committed to our goal of providing great products and unmatched customer service and capitalizing on opportunities to ensure we gain profitable market share regardless of the level of industry growth.”

Brian Nagel, an analyst with UBS Securities LLC, wrote in a note ?EUR??,,????'??a weakening housing market continues to take a toll. Results suggest a considerable slowing at the company over the past few months from already soft levels earlier in 2007.?EUR??,,????'??

During the quarter, Lowe’s opened 40 new stores. As of November 2, 2007, Lowe’s operated 1,464 stores in 49 states representing 166.1 million square feet of retail selling space, a 10.1 percent increase over last year.

Rival Home Depot Inc. posted a 27 percent fall in quarterly profit last week and forecast a steeper fall in earnings for the full year. The Atlanta retailer said it was continuing to lose home improvement market share, though at a lower rate compared with the year earlier.