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Lowe's (LOW) Benefits From Its Digital Arm & Pro Business

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Lowe's Companies, Inc. (LOW - Free Report) appears strong on the back of its robust strategic endeavors. The company is continuously enhancing its omni-channel retailing capabilities in store operations, website and supply chain with an aim to resonate well with its customers’ demand.

Strength in the company’s Pro segment is a consistent key driver. Moreover, Lowe's is gaining traction from its recently-introduced Total Home strategy that includes providing complete solutions for various types of home repair and improvement needs. The strategy is an extension of the company’s retail-fundamentals approach.

Delving Deeper

Speaking of e-commerce, sales at increased 36.5% during the first quarter of fiscal 2021, representing a 9% sales penetration and a two-year comp of 146%. Digital sales benefited from customers’ shift toward online shopping. Management is making steady investments in omni-channel capabilities to drive growth. Moreover, its focus on perpetual productivity improvement or PPI initiative is routinely yielding results as the company leverages store payroll by using technology to lower tasking hours, improve customer service and drive sales productivity.

In addition, the company is making the most of an improved freight flow app, thus creating a complete-digital process. This app aids store associates to prioritize the incoming merchandise so that they can quickly position the product on the sales floor for customers. It also rolled out a secure mobile checkout to improve services in the high-traffic areas.

In a bid to continue augmenting sales from pro customers, the company is enhancing pro-focused brands. In fact, a deepened focus on the Pro category remains a significant component of its Total Home strategy. Markedly, pro sales outpaced DIY in the fiscal first quarter, registering above 30% comps growth. The Pro segment is expected to sustain its momentum with improved in-stock inventory levels, better service offerings and a new Pro loyalty program. Management is focused on boosting greater Pro penetration via the Pro Customer Relationship Management or CRM tool.

Lowe’s, which shares space with Home Depot (HD - Free Report) , Lumber Liquidators (LL - Free Report) and Builders FirstSource (BLDR - Free Report) , is also experiencing favorable home improvement market trends amid the pandemic. In fact, the company remains bullish on the home-improvement industry in general. Markedly, it is focused on repair maintenance business and is likely to benefit from robust home-improvement sales.

Wrapping up, Lowe’s looks well positioned to capitalize on demand in the home improvement market, backed by investments in technology and merchandise category as well as strength in Pro business.

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