Customers support Lowes Hardware Store in Farmingdale, New York on May 20, 2020.
Bruce Bennett | Getty Images
Lowe & # 39; s said it is moving from catching up mode to accelerating plans to gain market share from its rivals after working on its turnaround efforts for the past two years.
Speaking at an investor conference on Wednesday, CEO Marvin Ellison said the home improvement retailer will now focus on gaining around $ 900 billion in US home improvement market share.
"Our commitment to retail fundamentals was critical to our financial success in 2020," he said. "Our supply chain, in-store and digital systems would have collapsed under the weight of the unprecedented customer demand created by the pandemic without that focus."
He said "the best days at Lowe's are still ahead" as the company receives a boost from the popularity of home improvement projects during the coronavirus pandemic and benefits from its e-commerce investments.
The construction market reaffirmed its outlook at the investor conference and expects sales to grow by around 22% this year. Revenue in the same store is expected to grow about 23% over the same period, helping the company earn between $ 7.53 and $ 7.63 per share. After adjustments, Lowe forecasts fiscal 2020 earnings of $ 8.62 to $ 8.72 per share.
The company gave no outlook for the next year, fiscal year 2021.
Lowe's shares were up more than 6% on Wednesday. So far this year, the company's shares are up around 33%, bringing its market value to around $ 117 billion.
At the investor meeting, Ellison highlighted the investments and improvements the retailer has made in its brick and mortar and digital business since taking office two years ago. A loyalty program was launched among them to attract more business from home professionals such as electricians and building contractors. The website has been redesigned to simplify navigation and better handle data traffic. In addition, new digital fulfillment options have been added, such as: B. Roadside pickup and in-store lockers.
He said the company had come a long way from Black Friday 2018 when its website crashed. Now, he said, retailers are dealing with an increase in e-commerce demand every day due to the pandemic.
In the coming year the company will pursue a "Total Home" strategy. It will expand its online range from kitchen appliances to home decor. Ways to speed up and reduce the cost of fulfilling online orders by freeing up more space at the back of the stores are being tested. And products are localized on shelves in different markets, so that there are no snow blowers in stores in warm climates or lawn mowers in large cities.
Dave Denton, Lowe's chief financial officer, said his efforts over the coming months would increase the company's revenue per square foot. He said it expects to reach $ 423 per square foot by the end of this year and will increase its target to $ 460 for the future.
"2020 was a pivotal year for the company," he said. "We are taking market share earlier than expected and making the right investments for future growth."
The company's board of directors approved a $ 15 billion common stock repurchase program.
Correction: Lowe & # 39; s expects sales to grow by about 22% in fiscal 2020. In an earlier story, the outlook for fiscal year 2021 was given.