Lowe’s Home Improvement sees opportunity in indoor, outdoor furnishings

Company website offers many SKUs across bedroom, dining room, living room and office furniture

MOORESVILLE, N.C. — As readers will soon notice on our latest HNN 125 listing of Furniture and Bedding Retailers, home improvement destinations The Home Depot and Lowe’s placed well on the ranking, an indication that these big-box retailers are becoming more important in terms of furniture and home furnishings sales.

Although one doesn’t necessarily find the latest upholstery and case goods designs on the sales floor, they each have a pretty substantial mix of furniture on their respective websites across a broad range of categories.

Last year, for example, Lowe’s outdoor furniture and décor sales, which includes indoor furniture, were estimated at $815 million. Although it’s a fraction of its $90 billion in overall reported sales for the year, it’s a significant number nonetheless.

Thus, we thought it fitting to report on Lowe’s latest financials, which were released just before Memorial Day weekend.

For the quarter ended May 5, it reported net sales of $22.3 billion, down 4.3% from the $23.7 billion reported the same period last year.

Net earnings for the quarter totaled $2.3 billion, or $3.77 per share, compared with $2.33 billion, or $3.51 per share, the same period in 2022.

The company attributed the decline in sales to deflation in lumber prices, unfavorable weather conditions that impacted or delayed home construction or improvement projects, and lower DIY discretionary sales.

“We are pleased with the performance of our business despite record lumber deflation and unfavorable spring weather,” said Marvin R. Ellison, chairman, president and chief executive officer. “Although we delivered positive comparable sales in Pro (grade products) and online for the first quarter, we are updating our full-year outlook to reflect softer-than-expected consumer demand for discretionary purchases. We remain optimistic about the medium- to long-term outlook for home improvement and our ability to continue to grow market share through our Total Home strategy.”

As the name implies, The Total Home strategy aims to position the company as a one-stop shop for contractors and consumers alike. For consumers, this affords a wealth of products and services aimed at the DIY market. But it also recognizes furniture as a significant part of the mix.

A glance at the company’s website shows a full offering of not just things like area rugs and decorative accessories, but also sofas, sectionals, sleepers, dining sets, bedrooms, accent furniture and home office furniture, plus mattresses and outdoor furniture. It’s an omnichannel experience where people can browse, make their selections and purchase right on the site.

It’s perhaps an area of Lowe’s business some may not have been familiar with previously but makes sense given its Total Home approach. Obviously, Lowe’s fortunes are largely tied to the home improvement and construction market. But as consumers embark on these projects, outside and inside the home, we believe they also will continue to upgrade their furnishings in those indoor and outdoor spaces as well.

Thus, we believe the home improvement sector will be worth watching in the months ahead — for wholesalers and other furniture retailers alike — to gauge the importance people place on the home, and what continues to be their single largest investment not just in dollars, but also in the emotional bonds it represents for them and their loved ones.

Looking ahead, here are some other highlights of Lowe’s most recent report that offer a preview of its expectations for the full year.

+ Based on a 52-week year versus a 53-week year in 2022, it expects sales of $87 billion compared to $88 billion to $90 billion in 2022.

+ It anticipates adjusted operating income as a percentage of sales of 13.4% to 13.6% compared to 13.6% to 13.8% previously.

+ Interest expenses are projected at $1.5 billion.

+ Capital expenses are expected to be up to $2 billion.

+ Adjusted earnings per share are expected to be from $13.20 to $13.60, compared to $13.60 to $14.

Thomas Russell

Home News Now Editor-in-Chief Thomas Russell has covered the furniture industry for 25 years at various daily and weekly consumer and trade publications. He can be reached at tom@homenewsnow.com and at 336-508-4616.

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