Lowe’s slows store expansion
Despite mortgage and financial market turmoil, Lowe’s CEO Robert Niblock told investors today in a statement that initiatives currently underway “will make us more efficient and better positioned to capture profitable market share."
Lowe’s released the statement prior to the kickoff of the retailer’s annual analyst conference today in Charlotte, N.C. After nearly two weeks of wild news on Wall Street, Niblock reasserted that the retailer still expects per-share earnings to more than double over the next five years.
In addition to the earnings-per-share guidance, Lowe’s predicts that next year:
At its annual meeting, Lowe’s executives laid out plans to slow store growth and to focus on building new stores in a smaller format – the company said it is testing a 66,000-square-foot store in rural North Carolina, as well as new stores at 88,000-square-feet
"As we go forward, we can better match the right store with the right market," said Larry Stone, Lowe’s president and COO. In addition:
• The company expects to open 75 to 85 new stores reflecting square footage growth of approximately 5 percent. That compared with 120 stores to have been opened by the end of the current fiscal year.
• Lowe’s expects comparable-store sales to range from negative 3 to positive 1 percent.
• Sales are expected to increase 2.5 percent to 6.5 percent.
"As we look beyond the current fiscal year, uncertainty regarding the macroeconomic environment, including disruption in the housing and financial markets as well as the pressures on consumer spending growth, suggest it is prudent to remain cautious in our 2009 outlook," explained Lowe’s CFO Robert Hull Jr.
Gregory M. Bridgeford, executive vp-business develop, expounded on Hull’s comments, saying “Lowe's is well positioned to continue to gain market share in this highly fragmented industry.”
The company still sees growth opportunities in international markets, Bridgeford added. The retailer entered Canada for the first time in 2008.
“We will fuel our organic growth by remaining focused on homeowners and those serving homeowners by understanding what customers value and developing solutions to meet their ever-changing needs,” he said.