Lowe’s total sales up slightly in Q2

After four quarters of massive growth, U.S. Comps dip 2.2%.
Kenneth Clark
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On a two-year basis, U.S. comps are up 32%.

On the heels of Home Depot’s quarterly report, which showed comps returning to earth after an unprecedented year of consumer home-spending sprees, Lowe’s followed suit. The Mooresville, N.C.-based retail giant Wednesday morning reported a slight gain in total sales and a slight decline in U.S. comp-store sales.

Total sales for the second quarter were $27.6 billion, up from $27.3 billion in the second quarter of 2020. Comparable sales for the U.S. home improvement business decreased 2.2% for the second quarter, the company said.

Lowe's $3.018 billion in net income for the period marks the most profitable quarter in the retailer’s history.

The second quarter decline in comps has to be viewed in light of the company’s stratospheric comp-store-sales number from a year ago, which clocked in at positive 35.1%. On a two-year basis, U.S. comps are up 32%, the company said.

CEO Marvin Ellison pointed to strong second quarter growth in Pro, up 21%; installation services, up 10%; and strong growth across Décor product categories.

The CEO also said sales grew 7%, on top of last year’s triple-digit surge of 135%.

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Ellison also described the company's Total Home strategy as a business booster in a turbulent retail environment. 

"As anticipated during the quarter, we saw a decline in DIY demand versus last year, as many families transition back to pre-COVID purchase patterns and weekend mobility after Memorial Day," he said. "But because of the agility of our Total Home strategy, we were able to capitalize on Pro demand, driving the growth of 21% this quarter and 49% on a 2-year basis."

Lowe's saw impress growth in kitchen and bath, flooring, appliances and decor, even as these categories generated to 20% growth last year. These categories played a big part in the company's 17% increase in tickets over $500, the company said.

Lowe's for Pros

Sales to the pro customer outpaced sales to the DIY customer in the second quarter. Pro comps came in at 21% for the quarter, and they hit 49% on a two-year basis.

The company expects to see results from the recent upgrade of its Lowe's for Pros website and program to the cloud. "This important step in our Pro-business evolution enables enhanced features, faster updates, improved site stability and more personalized offers for the Pro," said Joe McFarland. "One new feature is rapid reorder, which enables our Pro customers to quickly reorder items they've frequently purchased through Lowe's."

Also during the second quarter earnings call, Ellison described the company's "intense focus" on the pro, which factored into last year's reset or U.S. stores. The reset led to a "more intuitive store layout for the pro, aligned across product adjacencies."

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Marvin Ellison

Ellison said he is seeing increased confidence among consumers when it comes to repairing and remodeling their homes. 

"The outlook for the home improvement industry remains very positive," he told analysts. "Residential investment is expected to remain high due to historically low mortgage rates, while home prices continue to appreciate. We're also pleased that we continue to see higher household formation trends and longer-term wallet-share shift to the home."

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The bottom line: Net income for the quarter ended July 30 was $3.018 billion, up 6.7% from the same quarter in 2020.

What the CEO said: “Our strong results this quarter demonstrate that our Total Home strategy is working, with U.S. sales comps up 32% on a two-year basis,” said Marvin Ellison, chairman, president and CEO.

For more information: The company’s financial news releases are contained here.