Mooresville, NC, June 17--Lowe's Cos. executives on Wednesday again played down concerns that the home-improvement retailer's business will be hit hard as interest rates rise.
Robert Hull, chief financial officer, and Larry Stone, senior vice president of operations, said other factors will prompt Americans to continue to focus on their homes and drive sales higher.
"We're not seeing a softening in our business," Hull said during a presentation at a Credit Suisse First Boston Corp. investor conference that was broadcast on the Internet.
Lowe's is in a good position to capitalize on demographic trends, such as the likelihood that aging Baby Boomers will increasingly turn to Lowe's for help on remodeling projects and the growing Hispanic population in the U.S., Hull and Stone said.
Hull said that he also expects ongoing maintenance of the "100 million houses in the U.S. that get older every year" will continue to generate non-discretionary purchases and that Lowe's plans to continue boosting its share of the home-improvement market.
Asked about the chain's expansion opportunities, Hull said the Mooresville, N.C., company continues to believe it has "hundreds of additional storing opportunities."
"We believe today that we can eventually have in the U.S. as many stores as the Home Depot does," Hull said. "Based on our site selection process... we can continue to identify 500 to 600 additional quality locations in the U.S."
Home Depot Inc. (HD) has about 1,550 stores in the U.S., while Lowe's has roughly 975 stores.
Only 20% of Lowe's stores are in the top 25 markets of the U.S., and so it will continue to penetrate those lucrative regions, Hull said. In addition, the chain's smaller format store developed last year is allowing Lowe's to enter markets with as few as 25,000 households while generating appropriate returns on investment, he said.
Those markets generally have less competition and lower entry costs, Stone added.
Lowe's is on track to open 140 stores this year and 150 next year, the executives said.
