In the third quarter, furniture retailer Lowe’s Companies Inc. (LOW) showed double-digit growth in comparable sales. During COVID-19, the company effectively exploited the momentum in the home improvement industry.
Lowe’s comparable sales in the third quarter rose 30 percent year-on-year. That’s a modest slowdown from last quarter’s 35 percent, but above Wall Street expectations. Lowe’s has boosted annual revenue which took a jump of 23 percent year-on-year to $13 billion,, over the past nine months. The company reported that almost all of its divisions saw strong growth in its footprints in all markets. Lowe’s has continued to improve profitability amid rising payroll costs. The gross margin of the company increased to 33 percent of revenue. The operating margin rose to 9.75%.
In recent quarters, Lowe’s has made several cost-cutting moves, allowing it to have access to extra funds when needed. Lowe’s has cash worth more than $8 billion and direct access to an extra $3 billion. During the current home improvement boom, the company used those funds to retain or even increase market share.
In the fourth quarter, Lowe’s revenues are projected to increase 15-20 percent, though operating margins will remain unchanged as the retailer continues to have COVID-19-related costs. The company said it was able to spend about $800 million on incentives for its workers who during the pandemic worked in stores.
Lowe’s made its name included to the list of few businesses that remained serving customers even during the lockdowns. Company’s outlets remained open to customers during the early phases of Covid crisis in the United States. In order to meet the increasing demand, the firm also recruited new workers.
Lowe’s Companies Inc. (LOW) stock dropped
-1.08 percent on December 2 trading to close the session at $151.81. Over the
past week, share price marginally dropped by -0.18 percent while the stock
price is still up 28.09 since start of the year.