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Lowe's (LOW) Banks on Digital Presence for Expansion & Growth
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Lowe's Companies, Inc. (LOW - Free Report) remains well-positioned to capitalize form its investment in omni-channel capabilities. Its focus on Pro customers and creating a strong digital base is benefiting the company. Apart from this, LOW’s Total Home strategy bodes well as consumers remain engaged in home related activities.
Digital Presence: Key Factor
Lowe’s strong digital base has been aiding the company’s performance for a while now. Management has been making investments in the omnichannel to provide frictionless experience to its online customers.
Evidently, sales at Lowes.com increased 5% during the fourth quarter of fiscal 2022 compared with 11.5% growth reported in the fourth quarter of 2021. This represents about 11% of total sales penetration. The company is also 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 focusing on 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 future.
Image Source: Zacks Investment Research
Other Factors Driving Growth
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 11th straight quarter of a double-digit Pro sales increase in the Unites States.
Management focused on improved Pro products and service offerings with the company’s new MVP Pro Rewards and partnership program. It also enhanced Pro Customer Relationship Management to meet Pro needs.
Apparently, LOW is quite focused on enhancing the Pro offering and will continue to add brands relevant to Pros. During the fiscal fourth quarter, the company made strong additions to the Pro brand arsenal. This includes portfolio of drinks from Coca-Cola, partnership with Hubbell, Klein Tools and Carhartt Apparel.
Wrapping Up
Lowe’s have been facing impact of lower lumber prices for a while now. The company expects 300 basis points and 100 basis points headwinds to sales in the first and second quarters of 2023, respectively, due to the impact of lower lumber prices. Such factors will weigh upon the company’s margins from a mix and rate perspective.
Nonetheless, upsides mentioned above will likely offer some respite amid 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 9.7%.
The Zacks Consensus Estimate for BuildABear Workshops’ current financial year sales and earnings suggests growth of 6.2% & 12.3%, respectively, from the year-ago reported numbers.
The Kroger Co. operates in the thin-margin grocery industry. It currently sports a Zacks Rank of 1. KR has a trailing four-quarter earnings surprise of 9.8%, on average.
The Zacks Consensus Estimate for Kroger’s current financial year sales and earnings suggests growth of 2.5% and 6.6%, respectively, from the prior-year reported numbers.
Ulta Beauty, a leading beauty retailer in the United States, currently carries a Zacks Rank of 2 (Buy). ULTA has a trailing four-quarter earnings surprise of 26.2%, on average.
The Zacks Consensus Estimate for Ulta Beauty’s current financial year sales and earnings suggests growth of 8.5% and 5.1%, respectively, from the corresponding year-ago reported figures.
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Lowe's (LOW) Banks on Digital Presence for Expansion & Growth
Lowe's Companies, Inc. (LOW - Free Report) remains well-positioned to capitalize form its investment in omni-channel capabilities. Its focus on Pro customers and creating a strong digital base is benefiting the company. Apart from this, LOW’s Total Home strategy bodes well as consumers remain engaged in home related activities.
Digital Presence: Key Factor
Lowe’s strong digital base has been aiding the company’s performance for a while now. Management has been making investments in the omnichannel to provide frictionless experience to its online customers.
Evidently, sales at Lowes.com increased 5% during the fourth quarter of fiscal 2022 compared with 11.5% growth reported in the fourth quarter of 2021. This represents about 11% of total sales penetration. The company is also 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 focusing on 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 future.
Image Source: Zacks Investment Research
Other Factors Driving Growth
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 11th straight quarter of a double-digit Pro sales increase in the Unites States.
Management focused on improved Pro products and service offerings with the company’s new MVP Pro Rewards and partnership program. It also enhanced Pro Customer Relationship Management to meet Pro needs.
Apparently, LOW is quite focused on enhancing the Pro offering and will continue to add brands relevant to Pros. During the fiscal fourth quarter, the company made strong additions to the Pro brand arsenal. This includes portfolio of drinks from Coca-Cola, partnership with Hubbell, Klein Tools and Carhartt Apparel.
Wrapping Up
Lowe’s have been facing impact of lower lumber prices for a while now. The company expects 300 basis points and 100 basis points headwinds to sales in the first and second quarters of 2023, respectively, due to the impact of lower lumber prices. Such factors will weigh upon the company’s margins from a mix and rate perspective.
Nonetheless, upsides mentioned above will likely offer some respite amid 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 9.7%.
3 Solid Picks
Some top-ranked stocks are BuildABear Workshop (BBW - Free Report) , The Kroger Co. (KR - Free Report) and Ulta Beauty, Inc. (ULTA - Free Report) .
BBW has a trailing four-quarter earnings surprise of 17.4%, on average. BuildABear Workshop currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BuildABear Workshops’ current financial year sales and earnings suggests growth of 6.2% & 12.3%, respectively, from the year-ago reported numbers.
The Kroger Co. operates in the thin-margin grocery industry. It currently sports a Zacks Rank of 1. KR has a trailing four-quarter earnings surprise of 9.8%, on average.
The Zacks Consensus Estimate for Kroger’s current financial year sales and earnings suggests growth of 2.5% and 6.6%, respectively, from the prior-year reported numbers.
Ulta Beauty, a leading beauty retailer in the United States, currently carries a Zacks Rank of 2 (Buy). ULTA has a trailing four-quarter earnings surprise of 26.2%, on average.
The Zacks Consensus Estimate for Ulta Beauty’s current financial year sales and earnings suggests growth of 8.5% and 5.1%, respectively, from the corresponding year-ago reported figures.