Lowe’s profits on the rise in Q1
Lowe’s Companies, Inc. reported first quarter 2019 sales increased 2.2% to $17.7 billion from first quarter 2019 sales of $17.4 billion.
Comparable store sales for the company’s U.S. business rose 4.2% while overall comps rose 3.2%.
The Mooresville, N.C. based company also posted net earnings of $1,046 million for the first quarter, up 5.9% from net earnings of $988 million for the same period a year ago.
Lowe’s said it sold the assets of Mexico retail operations, which resulted in an $82 million tax benefit for the quarter.
The company previously announced it would exit Mexico and it planned to sell the operating business. But after an extensive market evaluation, the decision was made to instead sell the assets of the business. The tax benefit of the sale offset $12 million of pre-tax operating costs for the Mexico retail operations in the quarter.
As of May 3, Lowe's operated 2,002 home improvement and hardware stores in the United States and Canada representing 208.8 million square feet of retail selling space.
Earlier this week, Lowe’s announced that it had acquired the Retail Analytics platform from Boomerang Commerce. Lowe’s said the technology will be integrated into the company’s core retail business while bolstering strategic and data-driven pricing and merchandise assortment decisions across its businesses.
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The bottom line: Sales are up 2.2% to $17.7 billion as profits rise 13.6% to $1 billion.
What the CEO said: "Our first quarter comparable sales performance is a clear indication that the consumer is healthy and our focus on retail fundamentals is gaining traction. Our commitment to improving in-stocks and customer service coupled with our focus on winning with the pro customer were integral to driving improved sales," said Marvin Ellison, Lowe's president and CEO. "However, the unanticipated impact of the convergence of cost pressure, significant transition in our merchandising organization, and ineffective legacy pricing tools and processes led to gross margin contraction in the quarter which impacted earnings. We are taking the necessary actions to more systematically analyze and implement retail price changes to mitigate cost pressure. Our recent acquisition of the Retail Analytics platform from Boomerang Commerce will also assist in modernizing and digitizing our approach to pricing. We are still in the early stages of our transformation, and with the changes we are putting in place, we expect to deliver improved gross margin performance over the balance of the year.”
Company info: The full Lowe’s first quarter 2019 report can be read here.
Comparable store sales for the company’s U.S. business rose 4.2% while overall comps rose 3.2%.
The Mooresville, N.C. based company also posted net earnings of $1,046 million for the first quarter, up 5.9% from net earnings of $988 million for the same period a year ago.
Lowe’s said it sold the assets of Mexico retail operations, which resulted in an $82 million tax benefit for the quarter.
The company previously announced it would exit Mexico and it planned to sell the operating business. But after an extensive market evaluation, the decision was made to instead sell the assets of the business. The tax benefit of the sale offset $12 million of pre-tax operating costs for the Mexico retail operations in the quarter.
As of May 3, Lowe's operated 2,002 home improvement and hardware stores in the United States and Canada representing 208.8 million square feet of retail selling space.
Earlier this week, Lowe’s announced that it had acquired the Retail Analytics platform from Boomerang Commerce. Lowe’s said the technology will be integrated into the company’s core retail business while bolstering strategic and data-driven pricing and merchandise assortment decisions across its businesses.
###
The bottom line: Sales are up 2.2% to $17.7 billion as profits rise 13.6% to $1 billion.
What the CEO said: "Our first quarter comparable sales performance is a clear indication that the consumer is healthy and our focus on retail fundamentals is gaining traction. Our commitment to improving in-stocks and customer service coupled with our focus on winning with the pro customer were integral to driving improved sales," said Marvin Ellison, Lowe's president and CEO. "However, the unanticipated impact of the convergence of cost pressure, significant transition in our merchandising organization, and ineffective legacy pricing tools and processes led to gross margin contraction in the quarter which impacted earnings. We are taking the necessary actions to more systematically analyze and implement retail price changes to mitigate cost pressure. Our recent acquisition of the Retail Analytics platform from Boomerang Commerce will also assist in modernizing and digitizing our approach to pricing. We are still in the early stages of our transformation, and with the changes we are putting in place, we expect to deliver improved gross margin performance over the balance of the year.”
Company info: The full Lowe’s first quarter 2019 report can be read here.