Charlotte, NC, June 12--Lowe's Cos. is on track to open 130 stores this year and plans to open 140 next year, company Treasurer Marshall Croom said Wednesday.
The home improvement retailer plans capital spending of $2.9 billion this year, Croom said during a presentation at the US Bancorp Piper Jaffray consumer conference in New York, which was broadcast on the Internet.
Neither Croom nor Lowe's President Robert Niblock commented on the company's earnings guidance during their presentations, but a question and answer period following their talks wasn't broadcast.
Last month, Lowe's said it expects earnings of between $2.16 a share and $2.20 a share on sales growth of 14% to 15% for the fiscal year ending in January. The Wilkesboro, N.C., company said then it expects same-store sales growth of 3% to 4% for the year.
Analysts surveyed by Thomson First Call (News - Websites) forecast earnings of $2.19, up from $ 1.85 last year.
Niblock said specialty sales are among Lowe's key initiatives to help it improve results from 2002, a year Niblock called "probably the best in our history."
Specialty sales, which include sales of products which Lowe's also installs, special orders and sales to commercial business customers, have been key to improving comparable-store sales, Niblock said. The category also has good potential for growth, given the desire of more do-it-yourself customers to have professional help on home projects.
Installed sales of such products as kitchen cabinets, flooring and windows generated $1.1 billion in sales for Lowe's last year and the company's goal is to double that number by 2005, Niblock said. Lowe's is testing a new model for its installed sales in 128 stores and plans a full rollout beginning this summer. The new model gives installers an opportunity to grow their business with Lowe's while improving customer service and support, he said.
Industrywide, installed sales represent a $32 billion market, he said.
Lowe's has tripled its special-order sales since 1998 from $697 million to over $2 billion last year, or about 8% of total sales, Niblock said. The company's target for 2003 is sales of $2.5 billion as it improves its electronic catalog systems, which speed orders, eliminate errors and allow Lowe's workers to spend more time selling and helping customers and less time dealing with paperwork and correcting errors. Today, 43% of the company's special-order sales volume by dollars is conducted electronically, and the goal is to increase that percentage, Niblock said.
Lowe's is also working to improve relationships with commercial business customers, particularly professional remodelers, property managers and certain trade professionals such as plumbers and electricians. The commercial customer generated 20% of Lowe's sales in 2002 but represents a $232 billion market, Niblock said.
As of May 2, Lowe's operated 875 stores, compared with 1,568 stores operated by larger rival Home Depot Inc.
Niblock said 73% of Lowe's stores operate within a ten mile radius of a Home Depot, up from 13% of stores in overlapping markets in 1994, the year Lowe's began its transformation from a regional small store operator to a national big box retailer.
