Mooresville-based Lowe’s Cos. reported better-than-expected fourth quarter earnings and a surge in sales as consumers, inspired by an improved economy, ramp up their home remodeling.
For the quarter that ended Jan. 30, Lowe’s reported net earnings of $450 million, or 46 cents a share, 2 cents higher than the average estimate of Bloomberg-surveyed analysts. Earnings were up 47 percent from the same period last year.
The country’s second-biggest home improvement retailer has made a slew of changes to its retail stores to help boost sales, including increasing space for seasonal items. Lowe’s continues to ride the wave of an improving U.S. housing market, as does its competitor Home Depot, which also reported earnings Tuesday that beat expectations.
“Macroeconomic fundamentals are aligned for modestly stronger home improvement industry growth in 2015,” said Robert Niblock, Lowe’s chairman, president and CEO, in a statement.
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Lowe’s also reported a 7.3 percent increase in sales at stores open at least a year, well above analysts’ estimate of 5.1 percent sales growth. In its U.S. stores, comparable sales rose 7.4 percent.
For the 2015 fiscal year, the company said it expects earnings per share of $3.29 and for total sales to rise 4.5 to 5 percent. Bloomberg-surveyed analysts expect earnings of $3.28 a share and a 4 percent growth in sales.
Home improvement stores, oft considered a barometer for the health of the housing recovery, are benefitting from an improved economy that’s inspiring consumers to spend more on projects. And though they’ve risen somwhat over the path month, prices at the gas pump are also freeing up consumers’ budgets.
“Strong income gains, mortgage rates that remain historically low and moderating home price growth should keep home affordability at elevated levels and provide more support to home buying in 2015,” Niblock said in an earnings call Wednesday.
Niblock said in a call with The Observer that its investment in customer service helps set Lowe’s apart from competitors like Home Depot. For example, the retailer has project specialists for both interior and exterior projects that work with customers both at its store and at the customer’s home.
“We’re focused on the omni-channel experience,” Niblock said. “The channel in which (customers) engage with us really depends on their needs for that specific occasion. Sometimes that’s online, sometimes it’s in store, sometimes it’s at home. Sometimes it starts in one channel and moves to another.”
As many young Americans delay homeownership, Niblock said the company also sees opportunity for growth in the apartment boom by marketing especially to the professional customer. For example, the company’s “really amped up” its lowesforpros.com site, which caters especially to professionals.
Lowe’s operates 1,840 stores in the U.S., Canada and Mexico. The company said it plans to open an additional 15 to 20 home improvement and hardware stores in 2015.