For the third quarter, Lowe’s Cos. pointed to strong sales and earnings gains and, in a conference call, announced a partnership with AARP to provide products and services for consumers who want to age in their own homes.
Lowe’s beat a Yahoo Finance-published diluted earnings per share estimate for the 2021 quarter of $2.36 and a revenue estimate of $22.06 billion.
Comparable sales advanced 2.2% in the quarter year over year, while comps for Lowe’s U.S. home improvement business increased 2.6%.
Total sales were $22.92 billion versus $22.31 billion in the year-earlier quarter, Lowe’s stated. Operating income was $2.79 billion versus $2.18 billion, in the year-before period.
Marvin Ellison, Lowe’s chairman, president and CEO, said in a conference call the company had good results from both do-it-yourself and pro sales as consumers took on more and bigger projects during the company’s third quarter. He added that consumers have engaged the company’s product offering broadly as it has encouraged them to use Lowe’s as a resource for a wide range of home needs including lifestyle-enhancing upgrades.
“Our elevated product assortment across our home decor offerings are resonating with consumers resulting in a particularly strong performance in appliances and flooring, and contributing to the 11% increase in ticket over $500,” he said. “The strength of the higher ticket categories reflects a continued consumer confidence in their homes as a sound investment and reflects the early success of our Total Home strategy.”
Although Millennials have been a focus for observers gauging recent home center gains, Ellison pointed out that Baby Boomers who are remodeling to retire at home have contributed to DIY growth, and Lowe’s is addressing their needs.
“For the past 18 months, the home has increased in importance for all of us and perhaps especially for our Baby Boomer customers who are increasingly interested in aging in place in their own homes. This morning, we are delighted to announce the launch of our Lowe’s Livable Home product and installation services in a unique collaboration with AARP.”
Lowe’s is offering everything from pull-out cabinet organizers to walk-in bathtubs to pull-down cabinets to non-slip kitchen mats to wheelchair ramps including in a Livable Home website section.
On the e-commerce front, Ellison pointed out that that sales grew 25% at lowes.com on top of 106% growth in the 2020 third quarter, rising to a 9% sales penetration in the last-completed period. The company has launched its own retail advertising network recently to enhance the online platform.
In announcing the financial results, Ellison said, “Our momentum continued this quarter, with U.S. sales comps up nearly 34% on a two-year basis, as our Total Home strategy is resonating with the Pro and DIY customer alike. In the quarter, we drove over 16% growth in Pro and 25% on Lowes.com. We also delivered operating margin expansion by driving productivity through disciplined operational execution and cost management. I would like to thank our front-line associates for their ongoing dedication to outstanding customer service. Looking forward, I remain confident in our ability to drive further market share gains, operating margin expansion, and long-term value for our shareholders.”