Lowe's Companies, Inc. ( LOW Quick Quote LOW - Free Report) has been benefiting from strength in its Pro businesses. Also, strong digital base has been aiding the company’s performance for a while now. Apart from this, LOW’s Total Home strategy bodes well as consumers remain engaged in home related activities. Let’s Delve Deeper
Pro customers continue to be a significant driver for LOW's business. In the fiscal fourth quarter, U.S. pro sales jumped 10% year over year and 36% on a two-year basis. This marks the 11th straight quarter of a double-digit Pro sales increase in the Unites States.
Management is quite focused on enhancing the Pro offering. During the fiscal fourth quarter, management made strong additions to the Pro brand arsenal. This includes portfolio of drinks from Coca-Cola, partnership with Hubbell, Klein Tools and Carhartt Apparel. Image Source: Zacks Investment Research
About its digital efforts, management has been making investments in the omnichannel to provide frictionless experience to online customers. Evidently, sales at Lowes.com increased 5% during the fourth quarter of fiscal 2022 and on top of that, 11.5% growth reported in the fourth quarter of 2021. This represents about 11% sales penetration. The company is focused on removing friction from the customers' online experience, which includes adding Apple Pay in the fiscal fourth quarter to improve conversion.
Lowe’s is also expanding the market-based delivery model by adding bulky products like grills, riding lawn mowers, stock cabinets and many more. This delivery model will enable the company to further consolidate its industry leadership position in appliances and help achieve profitable growth in the future.
Lowe’s remains prone to unfavorable foreign currency translations, owing to its exposure in the international markets. Also, the company has been facing headwinds from supply-chain costs. Such factors may weigh upon the company’s performance.
Nonetheless, the upsides mentioned above will likely help Lowe’s to battle such hurdles. Shares of this Zacks Rank #3 (Hold) company have declined 5.1% in the past three months compared with the industry’s fall of 8.2%. 3 Solid Picks
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