Analysts expect Lowe’s Companies (LOW) to post revenues of $17.68 billion—a rise of 1.8% compared to $17.36 billion in the first quarter of 2018. The company’s revenues are expected to be driven by positive SSSG (same-store sales growth). However, the decline in the store count and the company’s decision to exit some of its non-core businesses are expected to offset some of the increased revenues.
By the end of the fourth quarter of 2018, Lowe’s operated 2,015 stores—a fall of 139 units compared to the store count of 2,154 at the end of the first quarter of 2018. The closure of 51 Lowe’s stores and 99 Orchard Supply Hardware stores led to a decline in Lowe’s store count.
Lowe’s is focusing on achieving merchandising excellence, improving its operational efficiency, transforming its supply chain, and increasing its customer engagement to drive its sales.
In the fourth quarter, the company piloted merchandise service teams, which were responsible for making product presentations. The teams were also given the responsibility of setting and maintaining end caps and executing off-shelf displays. The tests resulted in improved sales productivity and reduced out-of-stocks. Lowe’s management planned to roll out merchandise service teams across its US stores in the first quarter. Along with these initiatives, the expansion of assortments and the company’s various marketing programs will likely drive the company’s SSSG.
For 2019, Lowe’s management expects its revenues to rise 2.0% with an SSSG of 3.0%. For the same period, analysts expect the company to post revenues of $72.46 billion—an increase of 1.6% year-over-year.