U.S. home improvement comps at Lowe’s in the second quarter grew 35.1% on a year-over-year (YOY) basis due to robus project demand from both do-it-yourself (DIY) and pro customers, the retailer announced during its quarterly earnings report. Lowe’s said it saw a significant increase in the number of new pro, DIY, and millennial customers during the quarter. While DIY sales outpaced pro comps during the quarter, pro sales delivered comps in the mid-20s, with demand accelerating during May through the end of the quarter.
President and CEO Marvin Ellison said online sales at Lowes.com grew 135% during the quarter, driving online penetration to 8% of quarterly sales. The retailer finished the replatforming of its website during the quarter, enabling Lowe’s to improve site functionality and sustain triple-digit growth without system interruptions.
In addition to replatforming its online website, Lowe’s also embarked on several initiatives targeting pro customers during the quarter. 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. Shortly after announcing its quarterly earnings, Lowe’s launched a tool rental program for pros.
“As over 70% of pros are currently utilizing tool rental programs, this will provide a meaningful opportunity for Lowe’s to deepen our relationship with this customer segment,” executive vice president of stores Joseph McFarland said on the company’s second quarter earnings call. “After a successful pilot [in Charlotte, N.C.], we’re launching this program nationwide with a broad product assortment, a fully-equipped mechanic shop, a large store footprint, and importantly, intuitive customer-facing technology that creates a fast, frictionless process for this time-pressed customer.”
Executive vice president of marketing William Boltz said all 15 Lowe’s merchandising departments generated positive comps exceeding 20%. Categories such as lumber, tools, and paint posted comps over 30%, driven largely by extensive indoor and outdoor project activity from both DIY and pro customers.
“Importantly, we saw significant improvement in installation-heavy categories such as flooring, millwork, and kitchen and bath,” Boltz said. “Lumber benefited from strong unit demand from both pro and DIY customers, as well as our investments in job lot quantities.”
Ellison said in the second half of the year, Lowe’s is reinvesting in the business to simplify the store environment and improve its service offering.
“These investments will include store resets to improve product adjacencies, bay productivity, and sales per square feet,” Ellison said. “We’re also advancing our supply chain infrastructure with our recent announcement that we’ll open 50 cross-dock delivery terminals, seven bulk distribution centers, and four e-commerce fulfillment centers over the next 18 months.”
