Lowe's Targets $1 Billion In Annual Savings And Expands Store Footprint To Drive Future Growth

Lowe’s Companies, Inc. LOW highlighted its near-term and long-term financial targets at its 2024 Analyst and Investor Conference today.

The company has introduced a standardized framework to harness generative AI, aimed at improving customer experiences and boosting productivity.

Also, the company launched the U.S. home improvement industry’s first product marketplace, partnering with new sellers and existing suppliers to expand its online assortment. This initiative strengthens Lowe’s position as a one-stop shop for all home needs.

Apart from this, in early 2025, Lowe’s will relaunch MyLowe’s Pro Rewards, a streamlined loyalty program for small-to-medium Pros.

The program will simplify earning and redeeming rewards, with Pro customers saving 5% daily on eligible purchases when using their MyLowe’s Pro Rewards Credit Card.

Moreover, Lowe’s is streamlining large Pro orders with direct supplier system integration, aiming to boost close rates and capture more Pro spend, while relying on suppliers for jobsite delivery.

FY24 Outlook: Lowe’s reaffirmed its outlook, projecting total sales between $83 billion and $83.5 billion (consensus estimate: $83.34 billion).

The company expects comparable sales to decline by 3.0% to 3.5% and adjusted EPS of $11.80 – $11.90 (consensus estimate: $11.89).

Lowe’s plans to unveil its next phase of Perpetual Productivity Improvement (PPI) initiatives, projected to deliver approximately $1 billion in annual cost savings.

To drive growth, Lowe’s plans to open 10-15 stores annually in fast-growing U.S. markets, building on recent successes and enhanced space productivity.

The company will also expand its rural assortments to 150 more stores, offering a one-stop shop with enhanced selections in pet, workwear, automotive, and utility vehicles.

Marvin R. Ellison, Lowe’s chairman, president and CEO, said, “As we look ahead to the expected recovery in home improvement, we are making investments to position the company for long-term growth. We are evolving our Total Home strategy to help solve our customers’ total home improvement needs with more value and exceptional service,”  

“At the same time, we’re building on our momentum with Pros now that we’ve reached 30% Pro penetration.”

Goldman Sachs analyst rated the company a Buy rating, with a price target of $276.

The analyst estimates FY24 sales of $83.3 billion, comparable sales of -3.3%, and adjusted EPS of $11.87.

Investors can gain exposure to the stock via IShares U.S. Home Construction ETF ITB and VanEck Retail ETF RTH.

Price Action: LOW shares are down 0.31% at $269.28 at the last check Wednesday.

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