In a first quarter where associate and customer safety took precedence and the company took many measures to limit the spread of coronavirus, Lowe’s was still able to achieve strong sales growth. The home-improvement retailer saw comparable sales grow 11.2% in the first quarter and U.S. home improvement comps grow 12.3% as a result of strong demand from both DIY and pro customers.
President and CEO Marvin Ellison said DIY comps slightly outpaced pro comps in the quarter, likely the result of spring weather in western and southern geographies and home-centered mindsets due to shelter-in-place orders across the United States. Lowe’s has placed a stronger emphasis on the pro customer since Ellison assumed the role of CEO in July 2018.
“Comps sales for pro [in the first quarter] were strongly supported by our focus on retail fundamentals, including job lot quantities, more flexible delivery, and the improved service model that we put in place in 2019,” Ellison said on the company’s quarterly earnings call. Some of the company’s 2019 efforts included adding dedicated pro loaders and pro department supervisors, improving consistency volume pricing, and adding dedicated point-of-sales terminals for pros.
Ellison said the company’s chief pro customer, the smaller, “pickup truck pro,” was less impacted by the economic downturn.
“Our pro growth is still really strong in the quarter and that strength continues and their pipeline is more delayed–not canceled–so [we’re] starting to see those jobs pick up,” Ellison said. “So [the pickup truck] pro is getting even more healthy as the weeks and days progress throughout the year.”
William Boltz, executive vice president of merchandising at Lowe’s, said the company posted positive comps in 14 of 15 merchandising departments, with weakness limited to installation-heavy products in the kitchen and bath category. The retailer posted double-digit comps in lumber, which benefited from strong pro demand and improved investments in job lot quantities. Core pro categories such as rough plumbing, hardware, and tools also posted strong double-digit comps in the first quarter, according to Boltz. Lowe’s said the trends it saw towards the end of the quarter, including an uptick in growth for both the DIY and pro customer segments, continued into April and May.
Ellison said shelter-in-place orders across the U.S. put an emphasis on online sales, which experienced a sharp uptick towards the end of the quarter. The company’s recent investments in online infrastructure and Google cloud migration benefited the stability of the Lowe’s website and allowed the retailer to handle increased traffic. During the quarter, online sales volume was up 80% and online penetration increased to 8% of total sales, according to Ellison.
