In the fourth quarter, Lowe’s (LOW) posted an SSSG (same-store sales growth) of 1.7%—compared to analysts’ expectation of 2.1%. The company’s SSSG was driven by a 2.3% increase in the average ticket size. The growth was partially offset by a 0.6% decline in the traffic. Looking at the monthly performance, Lowe’s posted an SSSG of 0.3% in November, 0.8% in December, and 4.8% in January.
In the United States, the company posted an SSSG of 2.4% for the fourth quarter with 0.9% in November, 1.4% in December, and 5.8% in January. The company has delivered positive SSSG in 11 of 14 geographical regions in the United States and eight of the 11 product categories. The tools and hardware, paints, lawn and garden, appliances, and lumber and building materials categories have posted above-average SSSG during the quarter.
Lowe’s online same-store sales rose 11% during the fourth quarter. Lowe’s management stated that the company didn’t fully capture heavy traffic on its website due to system challenges. To address the challenges, Lowe’s has appointed Mike Amend as the new president of its online business.
During the fourth quarter, the customer satisfaction scores for professional and DIY (do-it-yourself) customers improved. Also, customers responded positively to the Craftsman brand, which was introduced in Lowe’s stores in May.
In Canada, Lowe’s SSSG was negative due to weaker Canadian holiday sales and the continued integration of RONA with its processes.
Home Depot (HD) posted an SSSG of 3.2% with an SSSG of 3.1% in November, 3.1% in December, and 3.3% in January. In the United States, the company posted an SSSG of 3.7% during the fourth quarter with 3.4% in November, 3.5% in December, and 4.1% in January.
Next, we’ll discuss analysts’ revenue estimates for 2019.