Lowe's Comparable Store Sales Rose 4.2% in U.S. in Q1
Mooresville, NC, May 22, 2019-Lowe’s reported sales for Q1 2019 increased 2.2% to $17.7 billion from $17.4 billion in Q1 2018, and comparable sales increased 3.5%. Comparable sales for the U.S. home improvement business increased 4.2%.
The company reported net earnings of $1.0 billion for Q1 2019, compared to net earnings of $988 million for Q1 2018.
As of May 3, Lowe’s operated 2,002 home improvement and hardware stores in the United States and Canada representing 208.8 million square feet of retail selling space.
The company previously announced its intention to exit its Mexico retail operations and had planned to sell the operating business. However, in the first quarter after an extensive market evaluation, the decision was made to instead sell the assets of the business. That decision resulted in an $82 million tax benefit in the quarter. The tax benefit offset $12 million of pre-tax operating costs for the Mexico retail operations in the quarter.
“Our first quarter comparable sales performance is a clear indication that the consumer is healthy and our focus on retail fundamentals is gaining traction. Our commitment to improving in-stocks and customer service coupled with our focus on winning with the pro customer were integral to driving improved sales,” commented Marvin R. Ellison, Lowe’s president and CEO. “However, the unanticipated impact of the convergence of cost pressure, significant transition in our merchandising organization, and ineffective legacy pricing tools and processes led to gross margin contraction in the quarter which impacted earnings. We are taking the necessary actions to more systematically analyze and implement retail price changes to mitigate cost pressure. Our recent acquisition of the Retail Analytics platform from Boomerang Commerce will also assist in modernizing and digitizing our approach to pricing. We are still in the early stages of our transformation, and with the changes we are putting in place, we expect to deliver improved gross margin performance over the balance of the year.”