The Journal Gazette
 
 
Thursday, May 21, 2020 1:00 am

Online update helps Lowe's in quarter

ANNE D'INNOCENZIO | Associated Press

NEW YORK – Lowe's Cos.'s move to revamp its outdated online business in recent months paid off in the first quarter, as shoppers shut in because of the pandemic shifted to online services for supplies for their do-it-yourself home projects.

The nation's second-largest home improvement retailer behind Home Depot said quarterly online sales increased 80%. Lowe's had planned to offer curbside pickup services next year, but the pandemic accelerated those efforts and it launched the service in three days.

Meanwhile, the company's comparable sales for the U.S. home improvement business increased 12.3% in the quarter ended May 1. Marvin Ellison, Lowe's CEO, said that business got a boost also from shoppers using their stimulus checks on major appliances. Overall revenue increased 10% while net profits jumped 28%.

Lowe's report followed Home Depot, which also saw a surge in spending on cleaning products and home improvement items. But retailers' costs related to the pandemic are soaring.

Lowe's spent $340 million in virus-related costs in the first quarter, including bonuses and higher temporary pay for workers. The Mooresville, North Carolina-based chain made two special payments of $300 for full-time hourly associates and $150 for part-time hourly associates to help with unexpected expenses, totaling approximately $145 million. It also increased pay by $2 per hour for the month of April for front-line associates.

 Lowe's reported fiscal first-quarter profit of $1.34 billion, or $1.76 per share. That compares with $1.05 billion, or $5.90 per share, in the year-ago period. Earnings, adjusted for restructuring costs, were $1.77 per share.


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