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What Wall Street Expects from Lowe’s in 2019

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Mar. 7 2019, Published 2:17 p.m. ET

Analysts’ revenue expectations

Lowe’s Companies’ (LOW) management team expects the company’s revenue to rise 2.0% in 2019 with positive SSSG (same-store sales growth) of 3.0%.

For the same period, analysts expect Lowe’s to post revenue of $72.54 billion, which represents growth of 1.7% from $71.31 billion in 2018. The revenue growth is likely to be driven by positive SSSG and partially offset by management’s decision to close 51 Lowe’s stores and 99 Orchard Supply Hardware stores as well as exiting some of its non-core businesses.

Lowe’s management is focusing on merchandising excellence, transforming its supply chain, improving its operational efficiency, and increasing its customer engagement to drive sales.

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Lowe’s has announced that it will train its associates on smart customer service in the first quarter. Later, it will roll out smart mobile devices in its stores, which will provide associates with real-time data on products. The smart mobile devices will avoid the need for associates to leave the sales floor and lose out on engagement with customers.

The company also plans to roll out merchandise service teams across its US stores in the first quarter. These teams are responsible for product presentations in store. They also set and maintain end caps and execute off-shelf displays. Along with these initiatives, the expansion of the company’s assortments and various marketing and promotional efforts are expected to drive Lowe’s revenue in 2019.

Analysts’ EPS expectations

For 2019, Lowe’s management expects its adjusted EPS in the range of $6.00 to $6.10. Analysts expect the company to post adjusted EPS of $6.06 in 2019, which represents growth of 18.8% from $5.10 in 2018.

Next in this series, we’ll look at valuation multiples and analysts’ recommendations for both companies.

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