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Lowe's (LOW) Growth Strategies Appear Good: Apt to Hold
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Lowe's Companies, Inc. (LOW - Free Report) remains well-positioned to capitalize on the demand for the home improvement market, backed by investments in technology, merchandise category and strength in the Pro business. A strong digital base has been aiding the company’s performance for a while now.
LOW’s Total Home strategy, which includes complete solutions for various home improvement needs, also bodes well. Buoyed by such strengths, this renowned home-improvement retailer has gained 26.6% in the past year, outperforming the industry’s 14.1% growth.
Let’s Delve Deep
Lowe’s continues making investments in omnichannel capabilities to aid overall growth. These investments include expanding its online assortment, boosting the user experience and improving fulfillment. The company has also been enhancing the pick up in store experience to streamline processes and advance technology. These enhancements led to faster fulfillment and a 400-basis point rise in pickup in-store customer satisfaction scores in the first quarter of fiscal 2023.
Image Source: Zacks Investment Research
Pro customers have been a significant driver in Lowe's business. The company has been augmenting its pro-focused brands and had earlier refurbished its pro-service business website which is called LowesForPros.com. Management remains pleased with the continued enhancements to its assortment of Pro products from trusted brands. Lowe’s is also experiencing higher demand for paint, especially from the Pros business.
Management has launched Pro online business tools, the latest upgrade to its MVP’s Pro Rewards program. Management is quite focused on enhancing the Pro offering across the company’s stores and online with improved service levels, deeper inventory quantities, intuitive store layout and more Pro national brands. The Pro segment is expected to continue its momentum with improved in-stock inventory levels, enhanced service offerings and the Pro loyalty program.
Lowe’s has also been scaling its rural framework to as many as 300 additional stores by the year’s end, with a broader offering of farm, ranch and outdoor products. This will position Lowe’s as a one-stop shop for the rural side of the country. The company has enhanced its new store-inventory management system, or SIMS, which focuses on improving inventory visibility and operational efficiency.
To wrap up, Lowe’s is well-poised for growth considering the above-discussed tailwinds. The Zacks Consensus Estimate for Lowe’s fiscal 2024 sales and earnings per share (EPS) is currently pegged at $89.5 billion and $14.56, respectively. These estimates suggest growth of 1.9% and 8.8%, respectively, from the year-ago fiscal quarter’s corresponding figures, raising analysts’ optimism about the stock. A long-term expected earnings growth rate of 12.3% coupled with a VGM Score of A, further speaks volumes for this current Zacks Rank #3 (Hold) company.
Eye These Solid Picks
We have highlighted three better-ranked stocks, namely Abercrombie & Fitch (ANF - Free Report) , Urban Outfitters (URBN - Free Report) and American Eagle Outfitters (AEO - Free Report) .
The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial-year sales and EPS suggests growth of 3.4% and 732%, respectively, from the year-ago reported figures. ANF delivered an average trailing four-quarter earnings surprise of 480.6%.
Urban Outfitters, a sporting goods retailer, currently sports a Zacks Rank of 1. The company has an average trailing four-quarter earnings surprise of 12.2%.
The consensus estimate for Urban Outfitters’ current financial-year sales and EPS suggests growth of 5.1% and 57.1%, respectively, from the year-ago reported figures.
American Eagle Outfitters, a retailer of casual apparel, accessories and footwear, currently carries a Zacks Rank #2 (Buy). AEO ANF delivered an average trailing four-quarter earnings surprise of 9.2%.
The Zacks Consensus Estimate for American Eagle Outfitters’ current financial-year EPS suggests growth of 4.1%, from the year-ago reported figure.
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Lowe's (LOW) Growth Strategies Appear Good: Apt to Hold
Lowe's Companies, Inc. (LOW - Free Report) remains well-positioned to capitalize on the demand for the home improvement market, backed by investments in technology, merchandise category and strength in the Pro business. A strong digital base has been aiding the company’s performance for a while now.
LOW’s Total Home strategy, which includes complete solutions for various home improvement needs, also bodes well. Buoyed by such strengths, this renowned home-improvement retailer has gained 26.6% in the past year, outperforming the industry’s 14.1% growth.
Let’s Delve Deep
Lowe’s continues making investments in omnichannel capabilities to aid overall growth. These investments include expanding its online assortment, boosting the user experience and improving fulfillment. The company has also been enhancing the pick up in store experience to streamline processes and advance technology. These enhancements led to faster fulfillment and a 400-basis point rise in pickup in-store customer satisfaction scores in the first quarter of fiscal 2023.
Image Source: Zacks Investment Research
Pro customers have been a significant driver in Lowe's business. The company has been augmenting its pro-focused brands and had earlier refurbished its pro-service business website which is called LowesForPros.com. Management remains pleased with the continued enhancements to its assortment of Pro products from trusted brands. Lowe’s is also experiencing higher demand for paint, especially from the Pros business.
Management has launched Pro online business tools, the latest upgrade to its MVP’s Pro Rewards program. Management is quite focused on enhancing the Pro offering across the company’s stores and online with improved service levels, deeper inventory quantities, intuitive store layout and more Pro national brands. The Pro segment is expected to continue its momentum with improved in-stock inventory levels, enhanced service offerings and the Pro loyalty program.
Lowe’s has also been scaling its rural framework to as many as 300 additional stores by the year’s end, with a broader offering of farm, ranch and outdoor products. This will position Lowe’s as a one-stop shop for the rural side of the country. The company has enhanced its new store-inventory management system, or SIMS, which focuses on improving inventory visibility and operational efficiency.
To wrap up, Lowe’s is well-poised for growth considering the above-discussed tailwinds. The Zacks Consensus Estimate for Lowe’s fiscal 2024 sales and earnings per share (EPS) is currently pegged at $89.5 billion and $14.56, respectively. These estimates suggest growth of 1.9% and 8.8%, respectively, from the year-ago fiscal quarter’s corresponding figures, raising analysts’ optimism about the stock. A long-term expected earnings growth rate of 12.3% coupled with a VGM Score of A, further speaks volumes for this current Zacks Rank #3 (Hold) company.
Eye These Solid Picks
We have highlighted three better-ranked stocks, namely Abercrombie & Fitch (ANF - Free Report) , Urban Outfitters (URBN - Free Report) and American Eagle Outfitters (AEO - Free Report) .
Abercrombie & Fitch, a leading casual apparel retailer, 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 Abercrombie & Fitch’s current financial-year sales and EPS suggests growth of 3.4% and 732%, respectively, from the year-ago reported figures. ANF delivered an average trailing four-quarter earnings surprise of 480.6%.
Urban Outfitters, a sporting goods retailer, currently sports a Zacks Rank of 1. The company has an average trailing four-quarter earnings surprise of 12.2%.
The consensus estimate for Urban Outfitters’ current financial-year sales and EPS suggests growth of 5.1% and 57.1%, respectively, from the year-ago reported figures.
American Eagle Outfitters, a retailer of casual apparel, accessories and footwear, currently carries a Zacks Rank #2 (Buy). AEO ANF delivered an average trailing four-quarter earnings surprise of 9.2%.
The Zacks Consensus Estimate for American Eagle Outfitters’ current financial-year EPS suggests growth of 4.1%, from the year-ago reported figure.