Lowe’s Companies Inc. has a good year online in fiscal 2017 as sales grew 34%, while overall sales were up 5.5%. It’s also expanding its online reach with the acquisition of two distributors.
Lowe’s continued its efforts last year to build up sales to its professional, or Pro, customers, CEO Robert Niblock told analysts on the company’s year-end earnings call last week. “I’m particularly proud of how we’ve grown sales with Pro customers by focusing on breadth and depth of inventory, our portfolio of brands, localized assortments, and enhancing LowesForPros.com, as evidenced by our Pro growth rate outpacing DIY for both the fourth quarter and the full year,” he said, according to a transcript of the call from Seeking Alpha.
Online sales got an assist from e-commerce site upgrades, chief operating officer Richard Maltsberger told analysts on the earnings call. “We have optimized functionality and display for touch-screen devices to support a better mobile experience, improved product content recommendations, refined search algorithms, improved click-to-chat capabilities, and optimized our assortment,” which in turn were aided by feedback from online customer reviews, he said.
Two recent acquisitions are helping grow online and offline sales to professional builders. In November, Lowe’s bought Laurel, Md.-based Central Wholesalers, a distributor of maintenance, repair and operations products serving the Mid-Atlantic and Northeast, and in June Lowe’s completed its $512 million purchase of Maintenance Supply Headquarters, a Houston-based distributor of MRO products used to maintain facilities in the multifamily housing industry.
The two acquisitions expanded the Lowe’s MRO business to 16 distribution centers and more than $400 million in annual sales, Lowe’s says. Central Wholesalers sells online at Cwip.com and Maintenance Supply Headquarters at SupplyHQ.com.
“The integration of Maintenance Supply Headquarters and Central Wholesalers remains on track and provides a compelling opportunity to improve and expand our ability to serve multi-family property management customers,” Niblock said on the earnings call.
For the fourth quarter of fiscal 2017 ended Feb. 2, 2018, Lowe’s, No. 102 in the 2018 B2B E-Commerce 300, reported:
- Net sales of $15.49 billion, down 1.8% from $15.78 billion in Q4 of 2016.
- Gross profit of $5.23 billion, down 3.7% from $5.43 billion, resulting in a gross margin of 33.8% compared with 35.1%.
- Net income of $554 million, compared with net income of $663 million in the same period last year.
For the fiscal year ended Feb. 2, 2018, Lowe’s reported:
- Net sales of $68.62 billion, up 5.5% from $65.02 billion in fiscal 2016.
- Gross profit of $23.41 billion, up 4.2% from $22.46 billion, resulting in a gross margin of 34.1% compared with 34.6%.
- Net income of $3.45 billion, compared with net income of $3.09 billion in the same period last year.
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