Lowe’s Companies, Inc. (LOW - Free Report) hits a new 52-week high of $121.46, before closing the session a tad lower at $119.32 on Dec 17. Shares of this Zacks Rank #3 (Hold) company have rallied 20.9% in the past six months compared with the industry’s growth of 8.6%. It is gaining from robust digital efforts, solid performance of the merchandise category and strength in the Pro business.
The company’s strong digital presence has been aiding its performance for a while. Notably, it achieved 3% comps growth on lowes.com, driven by solid efforts to enhance online business. This followed a 4% increase registered in the preceding quarter. Going ahead, management aims to continue augmenting omni-channel capabilities and enhancing consumers’ digital shopping experience.
In this respect, the company plans to shift its online business to the Google cloud platform by the first half of fiscal 2020. Also, it is introducing features such as one-click checkout and scheduling of delivery. Such well chalked out efforts are likely to boost the company’s comps. For fiscal 2019, Lowe’s expects 3% rise in comparable sales.
Further, management remains optimistic about the home improvement business, backed by rising income and real residential investment. In third-quarter fiscal 2019, comparable sales for the U.S. home improvement business grew 3%, after reporting rise of 3.2% and 4.2% in the second and first quarters, respectively. In fact, the unit’s comps were positive in 15 geographic regions across the United States for the second successive quarter. Moreover, an improving job scenario, gradual recovery in the housing market and merchandising initiatives bode well.
Pro customers have been a significant growth driver for Lowe's. Moreover, in a bid to continue augmenting sales from pro customers, the company has been augmenting pro-focused brands. Additionally, Lowe’s refurbished the pro-service business website, LowesForPros.com, to give special attention to the needs of pro customers.
Banking on the increase in pro customers and efforts to revamp the digital platform, we are optimistic that the company’s solid growth endeavors will sustain its momentum in the long run.
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