Pro sales delivered positive results for home-improvement retailer Lowe’s in the fiscal third quarter. Online sales growth and positive storm-related sales contributed to total sales of $20.2 billion in the third quarter. On a year-over-year basis, sales were down compared to $20.5 billion in the third quarter of 2023.
Comparable sales in the quarter decreased 1.1%, driven by softness in DIY bigger-ticket discretionary spend, according to the company. As a result, Lowe’s reported net earnings of $1.7 billion in the quarter, down from $1.8 billion in the prior-year period.
“Our results this quarter were modestly better-than-expected, even excluding storm-related activity, driven by high single-digit positive comps in Pro, strong online sales, and smaller-ticket outdoor DIY projects,” Marvin Ellison, Lowe’s chairman, president, and CEO said.
During the company’s earnings call, Ellison said positive pro sales momentum is driven by investments to serve the small- to medium-sized pro customer.
“Our efforts to transform the pro shopping experience continue to pay dividends. We have the inventory depth and the brands that are the most important to these customers, and we’re making it easy for them to shop in our stores and online through our pro loyalty program,” Ellison said.
Ellison said the pro evolution for Lowe’s began to take place in 2018, when the retailer’s pro penetration was less than 20%. Since 2018, Lowe’s has taken steps to stock and expand pro brands, improved service levels in the stores, and invested in “never out key SKUs” to ensure the pro is always served when looking for particular items. Ellison said the company’s pro loyalty program is providing a level of stickiness among pro customers and digital online sales to pro is continuing to grow as at a double digit level. Lowe’s surveys indicate pro backlogs remain strong, providing a runway for future growth.
“We’re committed to growing pro at 2x to market because we think that there’s market share, we can continue to gain in the small- to medium-sized pro, we believe [market share] is up for grands, and it’s also a very fragmented marketplace,” Ellison said.
Executive vice president of stores Joseph McFarland said the recently launched Shop the Job digital shopping experience positively impacted pro sales in the period.
“[The] digital shopping experience helps our Pro loyalty customers purchase everything they need for specific jobs more quickly and efficiently, cutting down in the time spent sending runners from the job site to buy forgotten items,” McFarland said. “We launched this program with a focus on kitchen, bath, and flooring projects and look forward to expanding to additional project types as we incorporate our pro customers’ feedback on this initial rollout.”
In the third quarter for Lowe’s, the average comp ticket increased 0.2% on a year-over-year basis, driven by the strength in pro customer sales, an increase in the average ticket for appliances, and sales of storm-related products. Comparable transactions, though, declined 1.3% due in large part to the softness of DIY discretionary projects.
Online sales delivered 6% comparable sales growth in the period, during which Lowe’s experienced increased online conversion and traffic.
