Lowe's plans to open 150 to 160 stores this year, in line with the 155 that opened in 2006. The retailer will also enter Canada during this year's second half, and executives say the 1,385-unit chain still has the potential for 2,000 domestic stores.

During the fourth quarter, which ended Feb. 2, Lowe's same-store sales fell 5.3% year over year, while total sales dropped 3.7%, to $10.4 billion. Net earnings slid 11.5%, down to $613 million. For all of last year, sales rose 8.5%, to $46.9 billion, while net earnings shot up 12.3%, reaching $3.1 billion.

Executives expect a rough first quarter as well. Same-store sales are forecast to drop between 2% to 4%, though total sales are anticipated to rise between 5% to 6% from last year's Q1. "We do expect a tough environment again in 2007," said Robert Hull, the retailer's chief financial officer, during a conference call.