Lowe’s announced this week that it had a very strong first quarter of 2016, including an increase in sales of 7.3%. That compares to Home Depot’s 6.5% sales increase in the first quarter and, according to Citi analyst Kate McShane, marks the first time in six years that Lowe’s sales growth topped Home Depot’s.
In a conference call about the earning’s report, Lowe’s reported demand from its professional shoppers and its
Lowesforpros website as a main reason for the advantage over Home Depot. Analysts expected Lowe’s to post a 4% sales increase, but the professional contractor market created the huge increase.
“We continue to strengthen our Pro business, driving comps well above the company average,” Ricky Damron, Chief Operating Officer for Lowe’s said in a conference call. “We continue to collect feedback from Pro customers, our outside sales team and store employees, are working closely with our field based merchandising managers to address our local market opportunities and brands to further optimize our offering for Pro. We have also advanced our omni-channel resources for the Pro. We continue to utilize feedback from our Pro customers and Pro services team to enhance the features and functionality at our LowesForPros.com site that we re-launched last year, making it easy for Pros to manage multiple properties and quickly purchase items station wide.”
Damron added that Lowe’s is adding to its sales team that is targeting professional contractors. “We currently have over 180 Pro outside representatives in the field and have experienced great success with the program with continued strong growth in AEP comp sales,” Damron added. “Building on this success, we will continue to grow the program, adding additional AEPs to continue catering market opportunity with large Pro customers.”
And, Lowe’s plans to take a page out of the traditional distributor’s playbook by creating special events and offerings to their professional customers. “We are also reaching out the Pro to targeted marketing and special advance—such as credit events, bonus days, as spring propitiation days—to drive awareness and generate new business,” Damron says. “We have been pleased with these results in driving both incremental purchases with existing Pro customers and doting relationships with new customers.”
Damron also reports Lowe’s is starting to see more success through e-commerce and its lowesforpros.com website. “We’ve been very pleased with the receptivity from the consumer and the Pro customer regarding lowesforpros,” Damron reports. “We continue to see strong growth quarter over quarter as the customers become aware of the site. If you will look at Q1, we saw a sniffing growth in new register gross on the side, as well as conversion and growth as a percent of total dotcom business. So, we feel great about what we’re seeing. We continue to improve the functionality of the site through feedback from our customers and our sales teams to make it more conducive and easier for the customers to navigate.”
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