By Matt Grossman
Lowe's Cos. posted surging sales for the May-to-July quarter, joining a group of large retailers that have benefited from shifting consumer spending patterns during the Covid-19 pandemic.
Comparable sales, which include stores open at least a year, grew by 35.1% in the U.S., as people shopped at Lowe's for basic repair and maintenance projects, Chief Executive Marvin R. Ellison said. Demand for home repair strengthened as consumers redirected spending from other discretionary categories during the pandemic, Mr. Ellison added.
The chain of home-improvement stores, based in Mooresville, N.C., on Wednesday posted total sales of $27.3 billion, compared with $21 billion in last year's equivalent quarter. Analysts surveyed by FactSet had forecast sales of $24.32 billion.
All of the company's merchandising divisions recorded comparable-sales growth of greater than 20%, and comparable sales rose by at least 30% in each of the company's U.S. geographic regions. Sales on Lowes.com more than doubled, growing by 135%, the company said.
On a conference call with analysts, Mr. Ellison said Lowe's results represented strong retail fundamentals and market-share growth that will support the company beyond a short-term surge.
"It's difficult for a company our size to grow sales by 35% comp without having some significant market-share gain that's happening as well," he said.
Lowe's shares, which were up about 32% year to date through Tuesday, climbed a further 0.7% to nearly $160 on Wednesday.
As the coronavirus pandemic refashioned the U.S. economy, changing consumer habits have bolstered large retailers. Cancellations of vacations and other leisure activities have left people with more to spend on home projects -- augmented by federal stimulus checks and enhanced unemployment benefits.
In the home-improvement category, growth from do-it-yourself projects outpaced growth from sales to contractors for both Lowe's and competitor Home Depot Inc. in the latest quarter. People did more work themselves during the pandemic as they had more time at home and were less willing to bring in outside professionals, Lowe's executives said.
That trend played to Lowe's advantage in the quarter, given that it relies less on sales to contractors than Home Depot does.
"Our pro business is growing, but DIY has always been our strength, and we think that we're benefiting from the current trends," Mr. Ellison told analysts.
Lowe's is working to amplify sales to professionals as well, Mr. Ellison added, citing new programs to help contractors connect with customers during the pandemic.
Home Depot on Tuesday reported U.S. comparable sales growth of 25% in the fiscal second quarter, as higher sales of items such as riding lawn mowers and patio furniture helped make up for relatively softer sales of countertops, kitchens and other items that need professional installation.
Big retailers that sell a broader range of products have gotten a significant boost from shoppers as well. On Tuesday, Walmart Inc. reported comparable U.S. sales growth of 9.3% in the latest quarter as e-commerce revenue nearly doubled. Comparable sales at Target Corp. rose 24% in the quarter, with comparable online sales surging by 195% year over year.
Lowe's profit was $2.83 billion, or $3.74 a share, compared with earnings of $1.68 billion, or $2.14 a share, in the same three months of last year. Adjusting for special items, profit was $3.75 a share. Analysts had forecast an adjusted profit of $2.92 a share.
Citing economic uncertainty, Lowe's declined to provide forward-looking financial guidance, having withdrawn previous guidance in May.
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