Observers noted that the recent gains by Lowe’s Cos Inc, the world’s second largest home improvement franchise in terms of market share, can be attributed to greater purchasing power stemming from job, wage, and credit growth, as well as low interest rates that have proven most attractive for first-time buyers.
In addition, unseasonable weather has spurred consumers to go ahead with home renovations.
“We capitalized on increased demand for exterior products as a result of warmer weather, while at the same time helped customers tackle interior projects, allowing us to deliver positive comps in all product categories,” Lowe’s chief executive officer Robert Niblock told The Globe and Mail.
Lowe’s numbers went beyond analysts’ expectations. The chain’s U.S. stores posted 5.5 per cent growth in the fourth quarter. Net sales were up by 5.6 per cent, which amounted to $13.24 billion (against a projected $13.07 billion).
Same-store sales increased by 5.2 per cent in the quarter ending January 29, way above Consensus Metrix projections of 3.6 per cent. Despite net earnings falling to $11 million, Lowe’s officials are optimistic of an overall growth rate of 6 per cent in the current fiscal year.
Meanwhile, chief rival Home Depot exhibited 8.9 per cent growth in the same interval, demonstrating the resurgence of the home improvement market.
The home improvement sector is currently enjoying generous dividends in a robust fiscal environment briskly recovering from the crisis of 2008, as proven by the much improved growth in demand and sales volume among leading suppliers.