While the coronavirus has spelled disaster for many businesses, that is not the case with all. Lowes recently released sales figures for the first quarter and they were impressive.Lowe’s reported an earnings beat because it did what Home Depot couldn’t. While Home Depot has been increasing workers’ pay and benefits, Lowe’s has been focusing on improving its e-commerce platform. It also is working to attract business clients, including contractors and professional homebuilders, rather than customers taking on do-it-yourself projects. Home Depot has been taking similar steps, but its focus has been split between the different goals, and it shows in their sales. This is a knockout postexplaining why Lowe’s did so well this quarter.
An Increase in Sales
For the first quarter of 2020, Lowe’s saw an 11 percent increase in same-store sales. Experts believe this is due to individuals being at home more on account of restrictions associated with the global pandemic. These men and women had more time to work on home improvement projects and routine tasks carried out during the spring months. However, these same experts believe sales will moderate as the year progresses. Spring is the busiest time of the year for the home improvement industry, and the pandemic gave people the time to complete projects they have been putting off. With the help of a Lowe’s coupon, they could save more and get more done.
According to RealtimeCampaign.com, industry insiders aren’t concerned about an economic downturn associated with the coronavirus. They believe owners will choose to continue investing in their homes, stating this crisis differs from the housing recession seen in 2008. Sheltering in place gives these individuals more time to see what needs to be done around the home and carry out the projects. These same owners can save more by purchasing store gift cards through Raise.comat discounted prices.
The Effect of the Pandemic
Online sales increased 80 percent due to restrictions placed on brick-and-mortar stores, and Lowe’s offered curbside pickup to accommodate those who wanted to shop. Home Depot didn’t offer as many options as Lowe’s, and this may have affected sales as well. People were buying many things when shopping. They purchased appliances, cleaning supplies, and project materials such as paint. One area that did not see an increase in sales was heavy indoor installation equipment. This was likely due to homeowners being unwilling to allow others into their home due to concerns about the virus.
Better Numbers Across the Board
Refinitiv found that Lowe’s earnings per share came in at $1.77 versus the $1.32 expected. Revenue came in at $1.36 billion more than expected, and same-store sales came in at 11.2 percent, significantly higher than the expected 3.3 percent. However, caution is needed, as experts feel the coronavirus has impacted customer shopping patterns, and the same gains may not be seen throughout the year.
Lowe’s did have to take steps to account for pandemic concerns. Social distancing in stores was required, store hours were cut, cleaning tasks had to be carried out more frequently, and employees obtained pay raises to account for the added work. Home Depot sales beat expectations, but the company also dealt with ballooning costs. As a result, Lowe’s may be able to gain a greater market share. Only time will tell if this is the case. Regardless, customers benefit from coupons and sales as they get some much-needed work done. As a result, everyone wins.