Building on its long-term efforts to improve in-store and online pro customer offerings, Lowe’s delivered growth of 23% in the pro category during the fiscal fourth quarter and 54% on a two-year basis. The home-improvement retailer has increased its pro-specific offerings in recent years through the launch of a pro loyalty program, an MVP pro rewards and partnership program, deeper inventory quantities, a more intuitive store layout, and an increased number of pro brands.
The recently launched MVPs Pro Rewards and Partnership Program offers loyalty members access to business resources to help tackle back-of-house operations and exclusive offers for rewards on eligible purchases. The program will roll out on a nationwide basis in the first week of March.
“We redesigned our loyalty program based on feedback from our pro customers who expressed a desire for a business partnership rather than a series of stand-alone transactions,” Lowe’s chairman and CEO Marvin Ellison said on the company’s fourth quarter earnings call. “Our data shows that pros who leverage our loyalty and credit offering spend 300% more than pros not engaged in these programs.”
As part of its pro focus, Lowe’s took steps to improve inventory and job lot quantities in 2019 and launched its Lowe’s For Pros Loyalty program in 2020. Additionally, the home-improvement retailer introduced a Lowe’s Tool Rental program, launched a job site for pros in partnership with Streem, and partnered with HomeAdvisor to offer pro loyalty customers one-year subscriptions to the lead generation platform. Most recently, Lowe’s entered a more strategic phase of growth in the pro market by resetting the layout of its stores with pros in mind. The revamped pro shopping experience includes a dedicated Pro Zone area near the pro entrance with grab-and-go product section featuring popular pro items, and specially selected products.
As part of efforts to increase the omnichannel experience for customers, Ellison said Lowe’s is expanding its same-day and next-day fulfillment capabilities. Building on the retailer’s success in the Florida and Ohio Valley regions, Lowe’s completed the conversion of the Carolina region in the fourth quarter to a market-based delivery model for big and bulky products.
“As we continue to expand our market-based delivery model, we’re freeing up space in our 10,000 square foot store back rooms,” Ellison said. “And we are testing out different options to drive both greater in-store fulfillment and expand delivery alternatives for both pro and DIY customers.”
In addition to efforts to improve the in-store experience, Lowe’s has taken steps in recent quarters to improve the online customer experience. Sales on Lowes.com grew 11.5% in the fourth quarter on top of 121% growth in the fourth quarter of 2020. On a two-year comp basis, online sales have grown 147% and represented nearly 11% sales penetration.
Overall Financial Performance
Lowe’s reported total sales in the fiscal fourth quarter of $21.3 billion, and $1.0 billion increase from the fourth quarter of 2020. Net earnings increased from $978 million in the fourth quarter of 2020 to $1.2 billion in the fourth quarter of 2021. Comparable sales for the retailer’s U.S. home improvement business increased 5.1%.
For the full fiscal year, sales increased from $89.6 billion in 2020 to $96.3 billion in 2021. Net earnings for the fiscal year were $8.4 billion, compared with net earnings of $5.8 billion in the previous fiscal year.
