LOWE’S GOES FUTURISTIC WITH VIRTUAL REALITY HOME IMPROVEMENT FOR CUSTOMERS

Lowe’s has successfully tested the Microsoft HoloLens in its stores in Raleigh and Seattle – so successfully that it plans to expand the technology to three more yet-to-be-disclosed locations.

The HoloLens brings high definition hologram images overlaid to real world surroundings. A customer can use the technology to visualize their home improvements. For example, a customer can go into a Lowe’s store and design their kitchen while sorting through Lowe’s assortment of appliances and material samples. To take it even further, a customer can select an item they saw and liked on Pinterest, and a similar item sold by Lowe’s will appear.

Kyle Nel, executive director of Lowe's Innovation Lab, told USA TODAY in a briefing: "Mixed reality takes some getting used to, because we're all used to pinching to zoom to get closer to things instead of just walking forward. The idea of using small samples and swatches to try and imagine what a room looks like seems very antiquated now."

To try out the HoloLens in the store requires an appointment, especially on the weekends. Lowe’s Innovation Lab is looking for ways to stay ahead of technology, and stay ahead of rival Home Depot.

Source: Investopedia

HOME DEPOT AND LOWE’S ATTENTION TO PROS SHOW DOUBLE DIGIT SALES INCREASES

Both Home Depot and Lowe’s report that they have increased sales to professional customers by double digits. They have taken several steps to seek out professional and MRO buyers, including adding products to their pro business lines as well as offering new services, making it easier for pro customers to order and receive supplies. “We continue to strengthen our pro business, driving comps well above the company average, by further advancing our products and services offering to better serve the pro customer,” said Lowe's COO Ricky Damron during the company's Q1 earnings conference call.

Lowe’s has developed an omni-channel approach to pro business, using Account Executive Pro Services with more than 180 representatives in the field. They also have a targeted marketing strategy aimed at the professional customer and buying events in store to generate new business.

Home Depot offers pros private label cards with extended terms and special return policies. They are also expanding a flexible delivery program seven days a week and next-day delivery, as well as in-store pick-up in 2 hours. Home Depot says it currently has a small percentage of sales in building and maintenance and Menear said “we think there’s lots of opportunity to grow.”

Source: Inddist.com

ACE HARDWARE RANKS #1 IN CUSTOMER SATISFACTION FOR THE 10th YEAR IN A ROW

The J.D. Power 2016 Home Improvement Retailer Satisfaction Survey awarded Ace Hardware top ranking for their 10^th straight year. The study surveys 2,995 customers who purchased home improvement-related products from a home improvement retailer in the last 12 months, and was conducted in January and February 2016.

On a 1,000 point scale, Ace Hardware scored 810 in overall customer satisfaction, followed by Menard’s with a score of 803. Lowe’s placed 3^rd at 799. The overall average across retailers was 795, up from 788 a year ago. The Home Depot was just at the average with 794. The study found that average drops significantly when an initial greeting in the store takes longer than 2 minutes. Customers also want the retailer to provide advice, and be able to answer their questions effectively in the store. "The retailer's staff is most critical to differentiating the experience provided to customers, especially when it comes to the timeliness of greeting customers, answering their questions or providing advice," said Greg Truex, senior director of the at-home practice at J.D. Power. "Retailers that train their employees to engage with customers proactively and assist them are more likely to provide them with a satisfying experience during these moments of truth."

Ace scored 855 in staff and service compared to 811 average.

According to the Home Improvement Research Institute, home improvement consumer spend is on the rise, with an expected 4% increase this year to $332 billion.

Source: Chain Store Age, JD Power.com 

APRIL RETAIL SALES REBOUND. WILL RETAILER STOCKS RECOVER?

Wall Street analysts are calling last week “Retail Wreck” due to numerous retailers’ news of poor sales, profits and future outlook on consumer spending. April retail sales came in higher than expected with a positive 1.3% gain, the highest gain in a year. Will strong sales in the first month of the second quarter help with a stock rebound for retailers?

Last week’s poor results were reported by many retailers, including Macy’s, Kohl’s and Nordstrom’s. Department stores are also responding to the strong online sales versus in-store that was reported, with online sales soaring 10.2% over last year. They are struggling with putting inventory in the right place to meet their increasingly complicated inventory and distribution demands.

Investors are waiting for home-improvement results this week from Home Depot, Lowe’s, Target and Wal-Mart to try to determine if the profit misses in the retail space is a problem just for department stores and apparel makers, or if it is a broader problem ahead for the consumer-driven US economy.

See the Accelerated Analytics’ blog from last week, reporting on the stock decreases across several retailers and apparel manufacturers: http://www.acceleratedanalytics.com/blog/2016/5/12/retail-stock-market-was-a-bear-yesterday-dropping-to-worst-l.html and continue to monitor our blog http://www.acceleratedanalytics.com/blog/ page this week as additional retailers report on Q1 results.

Sources: The Wall Street Journal, USA Today

JC PENNEY’S BRINGS DIY COMPETITION TO HOME DEPOT, LOWE’S, BEST BUY AND SEARS

JC Penny’s announced Monday that they will be doing a major expansion into home appliances. Starting in July, JC Penney’s will add an appliance showroom to almost 500 of its stores. The showrooms will feature kitchen and laundry appliances from Samsung, LG, GE Appliances, and Hotpoint, with over 100 appliances on display.

“Since launching major appliances in 22 stores last February, the response has been outstanding,” said Marvin R. Ellison, CEO, JC Penney’s. “The pilot confirmed that we should not limit our business to apparel and soft home in order to achieve significant revenue growth.”

The retailer also plans to allocate additional 25% of floor space to window coverings in about 500 stores, and pilot a new furniture line, Signature Design by Ashley, from Ashley Furniture, in 25 stores.

JC Penney’s is also testing an in-store flooring concept with Empire Today in stores in Tampa, Florida, and Washington, D.C., beginning this summer. "The current housing market presents a lucrative opportunity to diversify our Home assortment and strategically align with consumer spending patterns,” Ellison said.  “By combining our soft home and window coverings merchandise with the industry`s leading brands for appliances, furniture and flooring, JCPenney will become a destination for home design and redecorating, allowing us to weather-proof our business during seasonal periods of the year."

Source: Chain Store Age

Lowe's Launches New Social Campaign on Snapchap and Facebook in a Push to Reach Millennials

Lowe's Home Improvement is launching a new social campaign to make sure they’re reaching millennials as the tech-savvy generation begins to reach the age when they start settling down and buying homes. According to the Wall Street Journal, Lowes is turning to Snapchat and Facebook mobile video to help first-time home buyers discover home improvement tricks.

In the push to reach new potential customers who spend time on visual and video-driven social media platforms, Lowes is working with Omnicom advertising agency BBDO to create a new series of social videos. The Snapchat video series is called “In-A-Snap” and it allows consumers to follow along with home improvement projects and tap the screen to complete specific tasks. On Facebook, Lowes will be the first marketer to take advantage of a flip video application on Facebook’s mobile feed that allows viewers to change the orientation of the video. The “FlipSide” videos, which link back to Lowes.com, show simultaneously what can happen if a homeowner doesn’t tackle spring cleaning projects, versus what happens when a homeowner cleans the gutters, changes air filters or prunes overgrown shrubs.

Lowe’s Chief Marketing Officer, Marci Grebstein said, “The challenge as a marketer today is, how do you continue to engage consumers differently and within different social media platforms. We have been able to create informative and entertaining content based on how the platform works.”

Sourcse: The Wall Street Journal, Retailing Today

BUILDING SUPPLIERS SEE BEST QUARTER IN ALMOST A DECADE

Amid reports from the Commerce Department that housing starts in March were up 14.2% from last year, paint, drywall and other building suppliers are seeing an uptick in sales. Sherwin Williams reported on their investor call forecast-beating first quarter profits. They reported an 11% increase in sales revenue from its stores and a 44% improvement in profit.

USG Corp., manufacturers of drywall and ceiling tiles, reported the “best quarter we’ve had in almost a decade”. Sales increased 7% to $970 million.

Great weather is attributed to work on homes starting earlier in the year than usual. Illinois Tool Works Inc., supplier of screws, fasteners, nail guns and other items improved its operating margin to 21% from 17% last year. Says CEO Scott Santi, “We certainly exited the quarter in pretty good shape. We’re not seeing anything slow down.”

Building materials, garden equipment and supply dealers show estimated sales increases of 11.9% over Q1 2015. Analysts are predicting that Home Depot and Lowe’s may post stronger than expected sales for their quarters ending April 2016.

Source: Wall St Journal, Seeking Alpha

NEW HOME CONSTRUCTION DROPS AGAIN WITH SLOW START IN 2016 – WILL HOME DEPOT EARNINGS BE AFFECTED?

Showing the lowest rate since October, new housing starts fell 3.8% in January from a month earlier. U.S. home builders are reporting a positive outlook as spring approaches, citing solid fundamentals for housing demand, such as job gains and low mortgage rates. Demand for housing has been strong over the past year but growth has been slow, with housing starts just 1.8% higher than January 2015.

Home builders are reporting shortages of land and labor, leading to project delays and higher construction prices, which lowers demand for new homes. However, new home sales in December were up 9.9% from a year earlier. “The weak showing in construction activity is broadly consistent with the recent souring in home builders’ sentiment, and when combined with the downdrift in permit approvals it suggests some slowdown in the months ahead,” said Millan Mulraine, economist at TD Securities USA, in a note to clients.

The Home Depot performed very well in 2015, giving investors better returns than competitor Lowe’s. The Home Depot opened 2016 with a large pullback due to fears about the general economy and the housing market in particular. An anticipated rise in mortgage rates has not happened and Home Depot is gearing up for spring, its busiest period of the year. The company will hire more than 80,000 workers for its 2,000 stores and 75 distribution facilities. The Home Depot’s domestic business has kept it in the lead, but with Lowe’s announcement of its acquisition of Canadian home-improvement chain Rona, international expansion could be important to future growth.

Source: WSJ

Specialized retailers capturing DIY marketshare and amazon joins the home improvement ranks

The Farnworth Group published a study that found that specialized retailers are taking more of the DIY market from big-box home improvement stores like Lowe’s and The Home Depot. Amazon is making its appearance as a favorite online home improvement source.

The study analyzed purchase behaviors among a variety of retail channels and different buying audiences, looking at in-store and online purchasing, category differences and top motivators. 44% of homeowners ages 45-54 turn to specialty retailers rather than big-box stores for flooring needs. Homeowners ages 18-34 are twice as likely as their parents to shop at a paint store. All homeowners agreed that getting the best deal and being able to shop online were key motivating factors.

Retailers and their manufacturers who understand the younger buyer are creating marketing strategies like innovative apps to reach their audience. Consumers are shopping for home improvement items online more than ever, and Amazon continues to increase its influence.

Home improvement stores still have most of the market, but increased competition from online and specialty retailers will require those retailers to focus on knowledgeable employees and local expertise.

Source: benzinga

LOWE’S ANNOUNCES Q2 EARNINGS RESULTS ARE UP, FALLING JUST SHORT OF ANALYSTS EXPECTATIONS

Lowe’s reported an 8.4% increase in profit for Q2 2015, with net earnings of $1.3 billion and $1.20 a share. This up from last year’s Q2 earnings of $1.04 billion and $1.04 per share. Analysts were expecting results of $1.24 per share.

The home improvement retailer’s net sales rose 4.5%, which was in line with expectations. Same store sales at stores open at least a year were up 4.3%.

“We posted solid results for the quarter and were able to capitalize on big-ticket market share opportunities with strong growth in categories like appliances and outdoor power equipment,” Lowe's CEO Robert Niblock said in a statement.

As of July 31, 2015, Lowe's operated 1,846 home improvement and hardware stores in the United States, Canada and Mexico representing 201.4 million square feet of retail selling space.

For fiscal year 2015, Lowe’s expects to add 15 to 20 new home improvement and hardware stores, and expects total sales to increase 4.5% to 5%.

Sources: USA Today, MarketWatch

Lowe's Improves Lowesforpros.com Website for Professional Customers

Lowe’s used feedback from professional customers to test and launch an improved LowesforPros.com website. Professional customers can make and track purchases of more than a half a million items via computer, tablet or smartphone. Customers can choose to buy online and pick-up in store or have their orders delivered directly to their business or job location.

Lowe’s intent is to make their LowesforPros.com a complete online solution to develop requisition lists, access purchasing reports and create custom catalogs that enable their customers to maintain their brand across multiple buyers and locations. The site also provides customers with purchase approvals and ability to process tax-exempt purchases.

The site also provides industry resources and gives 5% off online purchases with Lowe’s Business Credit.

"LowesForPros.com helps Pros save time, money and run their businesses as efficiently as possible," said Mike Horn, Lowe's vice president of ProServices. "Pros have the ability to buy online and pick-up in-store or have orders delivered directly to their business or jobsite while taking advantage of the 5 percent discount every day wherever they choose to shop with us – through their mobile device, tablet or computer. This new website was designed by the Pro, for the Pro."

Source: Retailing Today

LOWE’S COMPANY SHARES RAISED TO OUTPERFORM

With an improvement in housing and overall economic activity in Southeastern states, Lowe’s is expected to witness accelerating sales and potentially narrow its comp store sales with Home Depot in the region. A report this week forecasts a 4% growth at Lowe’s following disappointing Q1 2015 sales of $14.1 billion versus $14.26 billion. However, Lowe’s Companies’ revenue was up 5.4% compared to Q1 2014.

Several equities research analysts issued positive reports for Lowe’s stock, setting buy ratings over $80 per share. Experts expect Lowe's to complete the year with $3.94 EPS. 

Source: The Legacy

Home Depot and Lowe's Report increased sales in first quarter, Home Depot beats all projections

In the first quarter, Home Depot Inc. increased net earnings to $1.58 billion, up 14% from $1.38 billion a year ago. Home Depot reported sales of $20.9 billion for the first quarter of fiscal 2015, up 6.1% from prior year. Same store sales rose 6.1% and comp-sales for US stores were up 7.1%.

Home Depot adjusted its earnings estimates, expecting sales to grow 4.2% to 4.8% this year. Earnings per share are expected to grow 11-12% from fiscal 2014.

"We had a stronger-than-expected start to the year as we experienced a more normal spring across much of the country and continued recovery of the U.S. housing market," said Craig Menear, chairman, CEO and president of the Atlanta-based retailer.

The rebounding housing market also helped results at Lowe’s, who reported net earnings of $673 million for the quarter, a 7.8% increase over prior year. Sales increased 5.4% to $14.1 billion. Same store sales increased 5.2%. However, this did not beat Wall Street projections.

Lowe’s is expecting to open a total of 15 to 20 home improvement and hardware stores this year.

“I am pleased that we executed well and delivered another strong quarter,” said Robert A. Niblock, Lowe’s chairman, president and CEO. “We generated comparable sales growth in all regions of the country and across all product categories, driving strong earnings per share growth."

Source: Retailing Today

Walmart and Lowe's Acquire Target Locations in Canada

Walmart announced earlier this week its decision to acquire 13 Target locations in Canada. Lowe’s followed suit, announcing it will also acquire 13 Target Canada leases as well as a distribution center in Ontario. The Lowe’s deal is worth $125 million.

The store sites are across Canada and include markets where Lowe’s has low penetration. The distribution center is strategically located to serve Lowe’s current and the new proposed stores in Canada. The acquisitions are subject to court approval and the process should be completed by June 30.

"Since opening stores in Canada in 2007, we have developed a successful model for providing the Canadian customer with outstanding service and quality products for the home," said Sylvain Prud'homme, president of Lowe's Canada. "These additional locations will accelerate our expansion across the country, enhancing our presence in Western Canada and strengthening our base in Ontario. We are excited to bring Lowe's to more customers in more communities in Canada, further demonstrating our commitment to this important market."

Source: Retailing Today

CONSUMER SATISFACTION WITH RETAIL IS ON A DECLINE

The American Consumer Satisfaction Index (ACSI) reports that consumer satisfaction with retail is on the decline for the first time in four years.

The ACSI report states brick-and-mortar customer satisfaction fell flat or weakened, while Internet retail is up from last year. By category, overall satisfaction with department and discount stores stayed flat at 77, while the gap between best- and worst-ranked companies grew. Nordstrom was the top rated, gaining 4% to 86. They are followed by Dillard’s (81), Kohl’s (-1% to 80) and Macy’s (79). Walmart dropped 4% to 68 and is at the bottom of the category behind Target (+4% to 80), Meijer (78) and Sears (-5% to 73).

Among home improvement chains, Lowe’s rated best at 81, while Home Depot falls to the category’s bottom dropping 4% to 76.

Amazon remains at the top of the Internet sector, at 86. Netflix improved for the third straight year gaining 3% to 81. Overstock and eBay both dropped to 77 and 79, respectively.

The ACSI is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the US. The ACSI uses data from 70,000 customers annually for measuring satisfaction with more than 230 companies in 47 industries.

Resource: Retailing Today

Lowe's Gears Up for Spring - Plans to Hire 30,000 Employees

Lowe’s has announced plans to hire 30,000 employees in its US stores for Spring 2015. These seasonal jobs will be focused on customer service, and most employees will work 20 or more hours per week. The company is hiring and training new employees on a market-by-market basis. Hiring has already begun in the warmer climate states of Florida, California, Texas and Arizona.

 "As spring arrives, our stores are stocked with products homeowners use for their indoor and outdoor projects. To help make shopping and selection easier, we want our stores staffed with knowledgeable employees who'll provide exceptional service for customers," said Scott Purvis, Lowe's vice president of human resources operations.

 Home Depot hired 80,000 seasonal workers in winter/spring 2014, and analysts predict to see Home Depot follow Lowe’s with its own hiring uptick this year.

 Lowe’s has more than 1,800 home improvement stores.

Resource: Retailing Today

Lowe's CEO: Our Transformation Is Gaining Momentum

December 11, 2014

Lowe's CEO Robert Niblock cited the recovering U.S. economy as among the reasons why the company plans to focus more on market differentiation and omnichannel retailing.

The company said it will outline these and other strategic priorities in a meeting with investors on December 11 in North Carolina.

"We're at a great point in our company's evolution.  The housing market and broader economy are recovering just as our transformation is gaining momentum," Niblock said.  "We're building on our past success and finding new ways to serve and connect with customers."

Although the company shared few specifics, the company announced that it plans to increase its focus on:

• Enhancing its relevance to customers through omnichannel retailing
• Differentiating itself through better customer experiences
• Adapting to a changing home improvement landscape
• And delivering long-term profitable growth and substantial returns for shareholders

"We continue to generate solid cash flow and have exciting opportunities ahead of us," said Robert F. Hull, Jr., Lowe's CRO.  "Return on invested capital is expected to reach approximately 19 percent by 2017, an increase of almost 500 basis points over the next three years."

Lowe's also reiterated its sales and earnings guidance for the 2014 fiscal year:

• Total sales are expected to increase 4.5% to 5%.
• Same store sales are expected to increase 3.5% to 4%.
• The company expects to open six home improvement and four hardware stores.
• Diluted earnings per share of approximately $2.68 are expected for the fiscal year ending January 30.
• Lowe's currently operates more than 1,835 home improvement and hardware stores and has more than 260,000 employees.

Source: Retailing Today

Home Improvement Surging Ahead Of Holidays

November 19, 2014

Lowe's said its third quarter same store sales spiked 5.1% a day after Home Depot reported an even stronger increase.

Total company sales increased 5.6% to $13.7 billion driven by increased productivity of existing stores as evidenced by a 5.1% comp increase.  Home Depot said its third quarter same store sales increased 5.8%.  Lowe's profits increased 17.3% to $585 million while earnings per share increased 25.5% to 59 cents and were aided by $900 million in share repurchase activity.

"We are pleased with our performance, and continue to be cautiously optimistic about the home improvement landscape," said Lowe's chairman, president and CEO Robert Niblock.

Looking ahead, the company said it expects full year sales to increase 4.5% and same store sales to increase 3.5% to 4%.  The company plans to open six home improvement stores and four hardware stores this year.  Lowe's currently operates 1,836 home improvement and hardware stores.

Source: Retailing Today

Lowe's Takes On Big Apple With Small Formats

October 27, 2014

Home improvement in New York is in for a new look in 2015 when Lowe's opens two tiny stores in Manhattan.

Lowe's is coming to Manhattan to bring homeowners, renters and professional customers the products and services they need to maintain and improve their homes and businesses, the company said.  Its two stores are slated to open in the second half of 2015 at 2008 Broadway at West 68th Street and 635 6th Avenue at West 19th Street.

"We are excited to expand our presence to Manhattan and we look forward to offering Lowe's project expertise and tailored product selection in two convenient locations," said Richard Maltsbarger, Lowe's chief development officer.  "We know customers in Manhattan are already shopping with Lowe's online and at our New York area stores.  Based on our research, we are developing these locations to meet the unique needs of these customers."

Both stores will be approximately 30,000 sq. ft. and offer products and services that are locally relevant to customers, including appliances in a variety of sizes, home organization and storage products to maximize space, and inspiring home decor and accessories to refresh living areas.  Most items will be in-stock and many will be delivered from Lowe's New York area stores.

Lowe's operates roughly 1,835 stores in the U.S., Canada and Mexico and most are larger than 100,000 sq. ft.

Source: Retailing Today

Lowe's Recovers From Weather-Related Woes In Q2

August 20, 2014

A day after Home Depot reported strong second-quarter results, it was Lowe's turn to deliver strong quarterly earnings.

And the Mooresville, North Carolina-based retail giant did just that.  The company reported net earnings of $1.04 billion for the quarter ended August 1, marking a 10.4% increase over the second quarter last year.  Sales for the quarter were up 5.7% to $16.6 billion, as comparable-store sales were up 4.4%.

"We were able to recover most of the outdoor product sales missed in the first quarter due to unfavorable weather conditions," said Robert Niblock, president and CEO.

For Lowe's the expectation is that home improvement spending will continue to grow in concert with job and income growth.  The company's forecast for earnings per share remains unchanged, but Lowe's made a "modest reduction" to its sales outlook  for the year, based partly on year-to-date performance.  For the year, total sales are expected to increase about 4.5%, as comps are expected to increase about 3.5%.

The company operated 1,837 home improvement and hardware stores as of August 1, representing 200.8 million square feet of retail space.

Source: Retailing Today