Home improvement retailer Lowe’s is focusing on its Pro business and making other operational changes as it seeks to sustain the home improvement run.
During its fiscal Q4 earnings call Wednesday (March 1) Lowe’s Chairman, President and CEO Marvin Ellison said for the quarter ended Feb. 3, “We continue to gain traction with our total home strategy as consumers remain engaged in home-related activities,” adding that in Pro, “we’re capitalizing on our momentum with our Pro by growing our MVPs Pro rewards and partnership program, building relationships through our CRM tool and continuing to enhance our product assortment to meet pro needs.”
He touted the return to Lowe’s of Klein Tools, saying, “We know that our pros are loyal to certain national brands and Klein is the number one hand tool brand among electrical and HVAC professionals. This creates immediate credibility across trades.”
Ellison noted, “one question many of you have asked is about our Pro backlog and if they’re still healthy. We’re in constant communication with our pros through formal surveys, our Pro Counsel, and countless day-to-day conversations. In our January survey, more than 70% of Pros stated that they were booked out the same or more compared to 2022, and they remain confident in their ability to find jobs and hold on to their backlog.”
That’s being fueled by “homeowners with strong balance sheets and record levels of equity,” he said, adding that, “From our perspective, the core drivers of our business, disposable personal income, home price appreciation and the age of housing stock remained supportive.”
Moving on to omnichannel sales and payments innovation, Ellison said, “We continue to remove friction from the customer’s online experience, which includes adding Apple Pay this quarter to improve conversion. We’re also focused on removing friction from our customer’s omnichannel shopping journeys, like for appliances where customers often shop our showrooms before making a purchase online.”
Ending the quarter with roughly 1,738 U.S. stores, Ellison pointed to changes in its delivery model as part of the omnichannel refocus. Saying Lowe’s added two new geographic in the quarter to serve 10 geographic regions supporting more than 1,000 stores, he added that “in the market-based delivery model big and bulky products flow from our supply chain directly to customers homes, replacing our inefficient store delivery model. This delivery model is enabling us to further consolidate our industry leadership position in appliances, and it positions us for profitable growth in other big and bulky product categories” like grills, riding mowers and more.
On the DIY side, Merchandising EVP Bill Boltz said new products like Lowe’s private-label paints performed well in Q4, noting that “We were particularly encouraged to see a strong increase in demand for custom cabinets driven by improved lead times, as well as an expanded suite of digital tools, along with our team of talented virtual designers, all of which help our customers tailor the right solutions for their budgets and design preferences.”
Looking ahead, Boltz said Lowe’s is “ready to capitalize on spring with the best in-stock positions that we’ve had in three years, right on time to support our biggest selling season of the year. In addition to an enhanced assortment in strong in-stock levels, we’re also making strides in driving merchandising productivity as part of our enterprise-wide perpetual productivity improvement initiatives.”