Let's Build Something Together: Investor Relations

Within a company, I have learned that it is important to have strong Investor Relations. Company's reputations are greatly influence by how well their stock performs, and it is important to communicate to the public about any positive, or negative business changes. This includes annual reports, the CEO's letter to the shareholder, and any news releases about the company's earnings.

Lowe's investor relations information is easily accessible to shareholders and the overall public right on their website. By clicking investor relations on the Lowe's homepage, http://www.shareholder.com/lowes/index2.cfm, there are numerous links you can choose from to see how their company is really doing.

I was surprised by Lowe's annual report. http://images.lowes.com/animate/LOWES_2007AR_nav-FINAL.pdf

In Lowe's Fiscal 2007 year, they reported:
> $260 million invested in their distribution network to further enhance service to their stores.
> $350 million invested in ensuring that their stores remain easy-to-shop and feature informative signage, and great displays.
> $3.3 billion invested in new stores. They 153 more stores.

It has many beautiful pictures of families and their homes, smiling faces, happy customers, yet it was more like an economical piece than a marketing piece. I expected Lowe's to have something more creative. The company simply poseted its annual Securities and Exchange Commision 10-K filing. Althought that is what an annual report is supposed to do, it would be in their best interest to put some fun into the report. Perhaps, making the annual report more computer interactive, rather than just posting the report up on the web. The more fun people have with it, the more likely they will want to get involved.

Lowe's did however take this opportunity to incorporate a little bit about their goals, and what they stand for. This gives customers a sense of what Lowe's is all about, what they stand for, and what type of company people are supporting when they do business there. They explain that they are continuously looks for ways to become more efficient, and include the different measures they are taking to ensure company improvement. They touch upon distribution, expense management, technology, training, evaluation, and most importantly their community service and partnerships with charities.

"Our door of opportunity is finding greater efficiencies in every aspect of our business to drive long-term profitability."

Another important PR vehicle is the CEO's letter to the shareholders. This is conveniently found in the beginning of Lowe's annual report.
Robert A. Niblock, CEO and chairman of the Board, begins the letter by admitting in the very first paragraph that 2007 was a very difficult sales year for Lowe's and other home inmprovement companies. I think it is very smart to come right out with the negative news first, because that only means you can only get positive from there. He talks about the rapid decline in housing turnover, our current economic situation, and extreme weather that has affected the company negatively. However, he makes it a point to inform the shareholders that, "with more than 60 years of retail experience, we have weathered many cycles." He showed how duespite such challenging times, Lowe's continued to gain share, open up new stores covering all 50 states, as well as opening their first store outside the US in the Greater Toronto Area.

Niblock genuinely thanks his employees, and makes it known how important and valuable their work and dedication is to Lowe's. A picture of him is posted at the begining of the letter, which makes the letter more personable. It's as if he is directly addressing each reader, I can almost see him reaching out for a hand shake =)!!! I think that investors can feel at ease when reading this letter. The fact that the CEO was so honest when reporting their past and future challenges, shareholders feel as though they aren't being left in the dark about the company, and they constantly know what's going on. This letter sends messages of hard work and dedication, stability, honesty, and genuine concern. It is credible, because when reporting ALL the facts, including the BAD NEWS, the rest of the information is believable, because the company isn't hiding anything. It is important to make shareholders feel secure and part of the company, and Lowe's certainly does that. It instills confidence in their invesors. =)

YOU'RE THINKING ABOUT BECOMING ONE NOW AREN'T YOU!!!

Lowe's annual report and shareholder may be OLD SCHOOL, but their last news release on the company's earnings is NEW MEDIA. I thought it was interesting that Lowe's invited the public to join it's 2007 earnings conference call webcast. They posted the time, link, phone number, and directions for how to listen in. Although this is an exciting way for people to be able to experience the actual meeting, however it may be nice to also include a written out news release so that people can have a hard copy of the company's earnings. Some people may not have time to sit there and listen to the whole meeting, so it may be more convenient for people to be able to choose between the webcast and the typed version.

A company's Investor Relations can be a very touchy subject, especially during economicly difficult times. Lowe's really achieved SUCCESS based on the environmental circumstances, and did an exceptional job communicating the realities, and future expectations to its shareholders, customers, and the public. This really attracts people to the company, and makes them feel confident to do business with them.