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Lowe’s Cos. is ramping up its efforts to get specific products into the hands of customers in rural areas.
The home-improvement retailer, whose first fiscal quarter beat analysts’ consensus forecast Tuesday, wants to make it easier for rural customers to purchase an array of products in one place.
“Today I’m excited to announce we’re now scaling our rural framework to as many as 300 additional stores by year-end, with a wider offering of farm, ranch and outdoor products that positions Lowe’s as a one-stop-shop, to make it convenient for rural customers to get what they need in one shopping trip,” said Bill Boltz, Lowe’s executive vice president of merchandising, during a conference call to discuss the results. The rural format includes broader product offerings in categories such as pet, livestock, trailers, fencing, utility vehicles, specialized hardware and Carhartt apparel, according to Boltz.
Customers in rural areas have told Lowe’s
LOW,
that they want these products, according to the company’s CEO. Marvin Ellison. “As we survey those customers, they give us a list of things they wish they could purchase in one shopping occasion and some of those types of things like Carhartt, apparel, farm and ranch types of items, and categories is part of our expansion opportunity and we think by doing those types of initiatives we’re going to see sales per square foot actually improve,” he said, during the conference call.
Lowe’s operates over 1,700 home improvement stores in the U.S.
The company’s stock rose 1.7% Tuesday, compared with the S&P 500 index’s
SPX,
decline of 1.1%.
Like many retailers this earnings season, Lowe’s saw first-quarter discretionary spending pressure. The company’s comparable sales decreased 4.3%, driven by lumber deflation, unfavorable weather and lower DIY discretionary sales. “DIY sales were pressured by the late spring and lower-than-expected discretionary demand, although we are encouraged to see better trends in periods of favorable weather,” said Ellison during the first-quarter conference call. “A late start to spring disproportionately impacts do-it-yourself customers who represent 75% of our business given many seasonal categories are heavily concentrated in DIY.”
The company is expecting a pullback in discretionary spending over the near team, according to the CEO. “What we can say is that the overall structural drivers for home improvement remain really strong, and so we are bullish to the medium and long-term health of this business,” he said. “Things like the savings rate of consumers, and you’re looking at pent-up demand in the housing shortage, the age of homes, I mean all of these things are still incredibly relevant.”
Related: Home buyers will now be able to put down as little as 1% on their home, Rocket Mortgage says
Lowe’s stock has risen 3.9% in 2023, compared with the S&P 500 index’s gain of 8.1%.
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