For the second consecutive quarter, U.S. home improvement comps increased by over 30% on a year-over-year (YOY) basis at home-improvement retailer Lowe’s, the company announced during its quarterly earnings report. The growth in comps benefited from consistent and strong project demand for both DIY and pro customers, according to Lowe’s, though DIY comps again outpaced pro comps during the quarter.
Growth exceeded 15% across all merchandising departments and 20% across all geographic regions during the quarter, president and CEO Marvin Ellison said on an earnings report call with investors. Pro comps exceeded 20% during the quarter and Ellison said Lowe’s continues to make investments to improve product and service offerings as well as the overall customer experience for pro customers. Ellison said the retailer began taking steps in the third quarter to reset the footprint of its U.S. stores, shifting to a project-focused store layout instead of a product-focused layout.
“We believe these changes will create a more intuitive shopping experience for our customers, especially to pro customers,” Ellison said. “And we redesigned the layout of our stores to improve product adjacencies and bay productivity with the goal of increasing sales per square foot.”
Executive vice president of merchandising William Boltz said Lowe’s is on pace to have store resets complete for over 90% of stores in the U.S. by the end of the fiscal year. In addition to product adjacencies, the store resets will include pro flex areas, making it easier for professional customers to grab products easily and check out.
In addition to improving store layouts, Lowe’s also rolled out a tool rental program “to increase our relevance with the pro,” executive vice president of stores Joseph McFarland said. Nearly three-quarters of pros rent tools at least once a year, according to McFarland. Lowe’s launched its first tool rental location in Charlotte during August and McFarland said the company is encouraged by early results and the strong feedback from customers.
Consistent with recent quarters, online sales experienced a strong boost during the quarter. Lowe’s said online sales increased 106% YOY during the quarter, representing 7% of total sales during the third quarter.
“We have made tremendous progress over the last two years with the right investments to improve our omni-channel retailing capabilities, enabling us to meet the ever-increasing expectations of customers to shop whatever way they choose,” Ellison said. “We continue to invest in our supply chain network as we open new cross-dock delivery terminals, bulk distribution centers, and ecommerce fulfillment centers to expand our fulfillment capabilities.”
In addition to replatforming its online website, Lowe’s has also embarked on several initiatives targeting pro customers during the fiscal year. In the early stages of the coronavirus (COVID-19) pandemic, Lowe’s launched a job site for pros in partnership with Streem, providing an augmented video chat service allowing pros to conduct virtual home visits with clients. The retailer also partnered with HomeAdvisor, offering pro loyalty customers a free, one-year subscription to the lead generation platform and a credit for an average of 10 free job leads.
