Shoppers patronage Lowe’s home-improvement store on May 20, 2020 in Farmingdale, New York.
Bruce Bennett | Getty Images
Lowe’s said Wednesday it expects sales to grow by about 22% next year, as its turnaround efforts gain momentum, and it gets a boost from the popularity of home improvement projects during the coronavirus pandemic.
Same-store sales are expected to rise by about 23% during the same period, helping it to earn between $7.53 to $7.63 per share, the company said. After adjustments, Lowe’s forecast earnings of $8.62 to $8.72 per share.
Lowe’s shares were up about 5% early Wednesday. So far this year, the company’s shares are up about 26%, bringing its market value to $116.5 billion.
Speaking at an investor meeting, Lowe’s CEO Marvin Ellison said the company will have a “total home” strategy as it expands its assortment of products that homeowners and home professionals need, from kitchen appliances to home decor, and offers a better customer experience.
He highlighted the investments and improvements that Lowe’s has already made across its brick-and-mortar and digital businesses. Among them, it’s launched a loyalty program to win more business from home professionals, such as electricians and contractors. It overhauled its website to make it easier to navigate and better able to handle traffic. And it’s added new digital fulfillment options, such as curbside pickup and in-store lockers.
“Our commitment to retail fundamentals has been essential to our 2020 financial success,” he said. “Our supply chain, in-store and digital systems would have collapsed under the weight of the unprecedented customer demand created by the pandemic without this focus.”
Yet, he added “the best days at Lowe’s are still in front of us,” as the company turns its attention to gaining share in the approximately $900 billion U.S. home improvement market.
He said the company has come a long way since Black Friday 2018 when its website crashed. Now, he said, the retailer is handling a surge in e-commerce demand day after day because of the pandemic.
Lowe’s Chief Financial Officer Dave Denton said its efforts in the months ahead will lift the company’s sales per square foot. He said it expects to have $423 per square foot by the end of this year and it will raise its goal to $460 for the future.
“2020 was a pivotal year for the company,” he said. “We are taking market share earlier than we expected and we are making the right investments for future growth.”
This is a breaking news story. Please check back for updates.