An employee stands outside a Lowe's location in Austin, Tex., on Feb. 27, 2017.Mohammad Khursheed/Reuters
Lowe’s Cos. Inc. said on Wednesday that professional builders and handymen were rushing back to its stores, boosting sales at a time demand from the home-improvement chain’s core do-it-yourself customers wanes, sending its shares up 11 per cent.
The rollout of COVID-19 vaccines in the United States over the past few months has opened the doors for professional contractors to complete maintenance, repair and upgrade jobs that were put on hold by customers owing to the pandemic.
As a result, sales of big-ticket items such as building equipment and materials have risen, helping offset a slowdown in paint sales and gardening tools that had surged when people were homebound.
This demand boost from “pro customers” helped the retailer report a 21-per-cent rise in second-quarter sales in the segment and forecast full-year revenue above Wall Street estimates.
Lowe’s predicted sales to professional customers, which can constitute up to a quarter of its business, would remain strong for the rest of the year and was optimistic that DIY demand will not peter out entirely.
“From a DIY perspective, I assume demand will mitigate a little bit, but it’s not going to fall off the floor either,” chief financial officer David Denton said on an analyst call.
Lowe’s said it expects fiscal year 2021 total sales of about US$92-billion, compared with analysts’ estimates of US$91.58-billion.
The impact of the Delta variant of the coronavirus on the home improvement space had injected some uncertainty into the forecast, Mr. Denton said, but he added that sales trends so far in August had been strong.
Lowe’s same-store sales fell 1.6 per cent in the second quarter, smaller than the 2.2-per-cent drop analysts had expected, according to Refinitiv IBES data.
Larger rival Home Depot Inc. reported a bigger-than-expected slowdown in U.S. sales on Tuesday.
The company’s net earnings of US$4.25 per share, in the second quarter, were above estimates of US$4.01 per share.
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