...Lowe’s Home Improvement Stores Sheila Thomas Webster University Abstract Lowe’s exists to help customers improve and maintain their biggest asset- their home. We do this by meeting the changing needs of our customers by providing inspiration and support whenever and wherever they shop. Whether our customers shop in store, online, by phone, or if we’re meeting them at their home or place of business, Lowe’s is ready to help. In our more than 1,830 stores, we have implemented multiple systems to improve the customer experience, including an upgraded store information technology infrastructure that allows customers and employees to access richer product information, enjoy an endless aisle of product choices and manage their projects from inspiration to enjoyment (Lowe’s.com). Online, we are rapidly expanding our assortments to offer customers a broader range of products that can be researched and purchased online, in store or via our mobile app. MyLowe’s makes it easy for our customers to automatically track and store all purchases on their online customer profile. We’ve vowed to “Never Stop Improving” so we can satisfy the ever-changing needs of our customers (Lowe’s.com). Lowe’s operates more than 1,830 stores in the United States, Canada and Mexico. We serve approximately 15 million customers each week and employ more than 260,000 people (Lowe’s.com). Our stores stock 12 product categories ranging from appliances and tools, to paint, lumber and nursery...
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...Accounting/Financial Analysis Of Lowe's Inc. Lowe’s is the world’s second largest home improvement retailer and operated 952 stores in forty five states at their fiscal year ending January 30, 2004. The company is currently in the midst of the most aggressive expansion in its history with 130 new stores opened in 2003 and another 140 slated for this year. Lowe’s saw 2003 sales reach approximately $30.8 billion, due largely to their focus on the retail customers and home-improvement projects. Fifty eight years ago Lowe’s began as North Wilkesboro Hardware Company, a neighborhood hardware store fittingly named after the small town it was located in. Owned by partners H. Carl Buchan and James Lowe, this concept was more than a living, it was a vision of creating a chain of hardware stores. The concept was easy and straight forward. Lowe’s concentrated on selling only hardware, appliances and hard-to-find building materials while eliminating wholesalers and dealing directly with manufacturers to establish a reputation of offering the lowest prices. The company went public in 1961 and began trading on the New York Stock Exchange in 1979 (NYSE:LOW). In 1982, Lowe’s had its first billion-dollar sales year, earning a record profit of $25 million, establishing them as an industry force. Lowe’s has posted extremely strong numbers in the past few years and the company has grown rapidly, swelling it’s store base from 500 to over 950. Sales have increased an average of 20% per year...
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...Executive Summary Analyst of Value Line Publishing, Carrie Galeotafiore, was put in charge of the company comparison and developed a comprehensive forecast model that could be used to gauge future success. Historical performance, costs of capital, current financial statements, and macroeconomic trends were all used in creating assumptive ratios and growth rates. With five year projected financials, Galeotafiore applied these projections to current company metrics in an effort to publish an accurate forecast. Before finalizing these projections, it is recommended that Value Line produce a detailed qualitative analysis to support the numbers. The purposes of this analysis are to 1) provide detailed forecast analysis for hardware giants Home Depot and Lowe’s. 2) compare these assumptions to the industries previous and potential performance 3) provide a judgment for Value Line readers for potential stock investment actions. Although these two companies have risen to the top of this industry it is recommended that investors hold their current investment position on both companies, as opposed to buy or sell. Problem Formulation As Galeotafiore prepares to release Value Line’s forecasts, there are several important factors that must be taken into consideration. Primarily, are the numbers used in the models for Home Depot, found in Exhibit 7, dependable? Can both companies be expected to achieve similar growth rates or has market saturation been reached? Next, is Galeotafiore...
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...Lucius S. Lowe started Lowe’s in 1921. During the 1950’s Lowe’s opened more hardware stores, primarily in small town in the southeastern United States. Lowe’s went public in 1961 and was successful at merchandising and financial management. In the 1980’s due to competition from Home Depot, Lowe’s joined the bandwagon and joined the big-box type store. Lowe’s has a vast market, which includes, homeowners, renters, and commercial business customers. Lowe’s focuses on, meeting the group of customers needs, Creators, as they feel meeting the Creators discerning needs this will help to exceed the needs of other customers. Lowe’s wants to be the first choice among customers when it comes to home improvement. Realizing customers would like a full solution to home improvement. Lowe’s does this by partnering with the customer through the improvement process by offering inspiration, planning, completion and enjoyment. They have three goals, possibilities, support and value. Lowe’s offers a wide array of merchandise stocking 40,000 or more items, and special order items. Lowe’s installation is offered through independent contractors. Lowe's is an Authorized Service Repair Network allowing a customer to contact Lowe’s with a problem and get a solution. They also have a store credit card, which offers a five percent discount on everyday purchases and if a purchase if over $299, the customer may choose the five percent discount or no interest financing. The commercial credit...
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...service. From the beginning, the retailer took a long-term approach by training its associates to form enduring customer relationships rather than push for incremental sales gains. As a result, the company grew very quickly becoming the fastest retailer in history to reach sales milestones of $30 billion, $40 billion, $50 billion, $60 billion and $70 billion in revenuesi. Despite this remarkable success, Marcus and Blank, the founders of the Home Depot, stepped down as leaders stating that continued growth required new leadership with fresh and innovative business approaches. Thus, in 2001, Robert Nardelli was named Chief Executive Office of the Home Depot. Nardelli introduced many new initiatives to the company such as, centralized buying, company-wide analytics and improved information systems, which were essential for the company to remain competitive. Many of his other changes, however, led to significant dissatisfaction, low morale, high turnover, reduced productivity, and general discontent among the associates that seriously derailed the company from the customer-centric approach that made the Home Depot such a success story during the Marcus and Blank era. The result was the most dramatic decrease in customer satisfaction in retailing history. In 2001, the Home Depot and Lowe’s both had customer satisfaction scores of 74 on the American Customer Satisfaction Index (ACSI). By 2005 however, customer satisfaction at the Home Depot fell to 67, becoming the worst performing retailer...
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...Initiative Although Lowe’s has grown to the second largest home improvement retailer worldwide, they still continue to trail Home Depot. At the center of Lowe’s success are their customer focus and their commitment to ethical behavior. However, Lowe’s 2012 Annual Report results a decline in the financial performance (Lowes.com, 2013). As a result of the decline the financial performance, Lowe’s has implemented the following strategic planning initiatives, Retail Relevance and Seamless and Simple. The Retail Relevance strategy is ensuring that Lowe’s keeps with customer love about the retail company while improving the retail operations (Lowes.com, 2013). The main focus of the Retail Relevance strategy is value improvement and product differentiation. Value Improvement enhances the core business by improving the line designs and lowering unit cost (Lowes.com, 2013). Product differentiation drives excitement in the store through better display techniques (Lowes.com, 2013). Value improvement and product differentiation will enable Lowe’s to compete more effectively by delivering better customer experience (Lowes.com, 2013). The Seamless and Simple initiative involves evolving the sales culture across all channels to include upgrading and continuously enhancing our information technology infrastructure, and allowing access to customer’s project and product status at all relevant touch points (Lowes.com, 2013). The Seamless and Simple initiative allows Lowe’s to deliver seamless...
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...Publishing There are two leaders for retail building-supply industry: Home Depot and Lowe’s, the two companies captured more than third of the total sale of the industry. Home Depot hold 22.9% market shares of the industry and Lowe’s hold 10.8% market share. Two companies are head to head competitor but focus on different market, Home Depot focused on large metropolitan areas and Lowe’s focused on rural area. Two companies both maintained online stores. Lowe’s has its own Web site: “Accent & Style” and focused on professional customer. Home Depot developed new type of retail stores in urban area and provide products and services in a compact format. Home Depot developed its first international retailer in 1994 and 10% of Home Depot international stores were built in global area at the end of 2001. Home Depot has 1,333 stores and 256,300 employees in 2001 and Lowe’s has 744 stores and 108,317 employees in the same period time. Return on equity shows how well a company uses investment funds to generate earnings growth. Generally a return on equity between 15% and 20% are considered desirable. Home Depot’s five year returns on equity all between 15% and 20% and Lowe’s five year returns on equity mostly less than 15%. The data prove Home Depot got higher net earnings than Lowe’s. Gross margin can use to determine the value of increasing sales. The higher gross margin means the company does a better job on turning material into the income. Gross margin can guide the pricing...
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...Lowe’s By You April 21st, 2014 University of Phoenix ECO-365 Introduction In the United States there are two major players in the home improvement industry. The biggest in The Home Depot. The other, while smaller having 502 less stores, is still a giant of the industry (Cramer, 2013). Through the recession Lowe’s stood while well The Home Depot fumbled. Lowe’s faces competition from opponents other than just The Home Depot as it expands beyond America. As Lowe’s seeks to enter the Canadian and Australian markets it will encounter more diversity than it has experiences so far. The complexities of doing business abroad and opening stores afar will become even more apparent as their international tactics change. Despite the challenges Lowe’s should expand further to become an even bigger player both nationally and globally. Global Competition’s Impact on Lowes In 2009, Lowes had 1,710 stores found throughout Canada and United States, 16 of these found outside the United States, with three stores in Mexico that opened in 2010, allowing for their exposure to bring them to a new level of sales internationally. (“Lowes Companies”, 2012) After much research it is found five competitors could impact Lowes, the #2 home improvement dealer in the world (Racine, 2012), but on different levels. The first competition is the main competition of Lowes, Home Depot, #1 in the world since 2005, (“Lowes Companies”, 2012) is expanding its sales by bringing in more Hispanics...
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...Project 3 Rough Draft Lowe’s: Bathroom tile When people want to fix something in their house they either: do it them selves or hire a professional. Do-it-yourself workers often save more money than if they hired a professional worker. Undoubtedly, the Lowe’s company target do-it-yourself customers who are on a fixed budget because they aim to have the lowest prices. The Lowe’s Bathroom tile ad’s main technique is using an everyday-type person to appeal to a large audience. Lowe's use of an unskilled character in an everyday situation makes the ad relatable to people because most people are not professionals, and it effectively reaches everyday homeowners. Their goal is to provide the best equipment with low prices so that customers can rely on their products for small or big home improvements. When people want to redesign or fix their homes, they either stop by at the Lowe’s store or The Home Depot store for supplies and equipment. The Home Depot Company has always been a competition for Lowe’s Company ever since they gained popularity in the home improvement hardware. Even though both stores sell almost the same things, the two seem to target very different audiences. The Home Depot stores “appeal to professional customers such as contractors and tradesmen” while the Lowe’s store “appeals to a larger do-it-yourself audience”. Both stores have distinct goals, which is to attract a certain audience to make more purchases. From watching the Lowe’s bathroom tile ad, they definitely...
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...stores, staffed by 200 workers, opened up in Atlanta. The organization began with Marcus as the chairman of the board of directors and CEO, and Blank as the president. Home Depot’s Profile: * Employees: 256,300 * CEO: Robert L Nardelli * Subsidiaries: EXPO Design Center; Maintenance Warehouse; Georgia Lighting; Apex Supply Company; Your "other" Warehouse; Home Depot Commercial Direct Division; Total HOME * Notable Stores: Home Depot; EXPO Design Center; Villager's Hardware; Del Norte * Major Competitors: Lowe's; Menard; TruServ. Lowe’s at a Glance: Lowe’s and Home Depot are the two largest retailers in the home improvement industry. Lowe’s being the 2nd largest in the industry, however, It was originally incorporated as “North Wilkesboro Hardware” in North Wilkesboro, NC. It was later renamed as Lowe’s in the year 1946 when C. H. Buchan bought-out his partner and brother-in-law James Lowe’s share of the company. Lowe’s started to go public in October 10, 1961 and in 1989 Lowe’s converted from a chain of conventionally sized stores into a chain of home improvement superstores. By 2001, Lowe’s had opened up 806 stores with 110,000 associates...
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...financial-statement-forecasting decisions of a Value Line analyst for the retail-building-supply industry in October 2002. The case contrasts the strong operating performance of Home Depot with the strong stock-market performance of Lowe's. Students examine a financial-ratio analysis for Home Depot that acts as a template for generating a comparable ratio analysis for Lowe's. The student ratio analysis is designed to build intuition with respect to interpreting individual ratios as well as ratio interrelationships (e.g., the DuPont framework). The historical-performance comparison suggests that investors are skeptical of the ability of Home Depot to maintain its performance trajectory, yet they project sustained improvements for Lowe's. Students are invited to scrutinize the analyst's five-year income-statement and asset-side balance-sheet forecast for Home Depot. The case expressly focuses on the asset side of the balance sheet as a preview for other cases using free-cash-flow forecasting. The Home Depot forecast exercise exposes students to the mechanics of financial-statement modeling and sensitivity analysis, which they can use in building their own forecast for Lowe's. Finally, the strong-growth assumptions for Home Depot relative to the modest-growth forecast for the industry suggest that the company can be expected to capture massive and perhaps unreasonable market share in the near term. The exercise provides a striking example of the importance of comparing bottom-up business forecasting with top-down...
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...concentration, both HD and LOW have a lot of bargaining power with suppliers of goods, (Soni, 2015). Home Depot's strategic vision has led to consistent growth in 2015, and all signs appear to support further gains in key business metrics for 2016. In its most-recent quarter, Home Depot saw comparable-store sales climb 7.3%, accelerating from the already robust pace in the previous quarter, and reflecting strength throughout Home Depot's product categories and geographical reach. The company booked 371 million transactions during the quarter, growing more than 4%. Substantially, Home Depot has invested in its e-commerce presence, which gives their customers the option to have products shipped to local stores for pick-up, or delivered directly to their locations (Caplinger, 2015). Ideally, their mobile apps and online website functions as a tool to maximize their business opportunity in ways most appealing to their customers (Caplinger, 2015). This forward thinking move has placed Home Depot ahead of Lowe's in the home-improvement industry and will help them achieve leadership in the industry going forward (Caplinger,...
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...industry are Home Depot and Lowe’s. Each has their eye on moving into international markets, each has superstores in all 50 states and each has evolved along different paths to reach their current positions. According to Fortune 500 Home Depot, Inc. is ranked at #25 and the second largest retailer in the US after Wal-Mart. Home Depot Inc. has its corporate headquarters in Atlanta Georgia. What began in 1979 as two 60,000-foot stores that resembled warehouses has grown to about 2,200 stores across North America, Puerto Rico, and China. Home Depot Inc. is publicly traded on the New York Stock Exchange as NYSE:HD. At the end of 2008 Home Depot Inc. employed 331,000 people. Home Depot sales recorded and posted in 2009 are $71,288.0 mil. Home Depot Inc. is the number one home improvement retailer with Lowe’s coming in second place with sales posted in 2009 at $48, 230.0 mil.. Founded in 1946 Lowe’s went from a small hardware store to the ninth largest retailer in the US. Lowe’s went public in 1961 and began trading on the New York Stock Exchange as NYSE:LOW in 1979. According to Fortune 500 Lowe’s Companies, Inc. is ranked at #47. Lowe’s Companies, Inc. are headquartered in Mooresville North Carolina. Lowe’s competes with Home Depot, Inc. (home improvement) and Sears (appliances) they are second to both. Lowe’s currently has 1640 superstores in the U.S. and another dozen stores in Canada. Lowe’s also plans to open stores in Mexico in 2009. Lowe’s has not moved as aggressively...
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...Mix Lowe’s Companies MKT/421 Marketing April 12, 2012 Marketing Mix Lowe’s was founded in 1946; Lowe’s has developed from a small hardware store to the second leading home improvement retailer worldwide and the 7th largest retailer in the United States (Lowe’s History, 2012). Lowe’s runs more than 1,745 stores in the United States, Canada, and Mexico. In 2011, Lowe’s received numerous distinguished industry awards, including number 50 on the Fortune 500 list, and three- time winner of the Energy Star Excellence Award in Retail (Lowe’s, 2012). Lowe’s sells a wide-range of home improvement products in its large, warehouse-style stores ranging from appliances to tools, paint, lumber, and nursery products. Lowe’s stocks 40,000 products in 16 categories (Lowes, 2012). Besides the products on hand they also offer hundreds of products by special order – offering. Lowe’s also offers installation services for some of their products as well. They offer installation services to more than 40 products. Examples of their installation products are appliances, bath, kitchen, plumbing, flooring, windows, doors, window treatments, lighting, and insulation among others (Lowe’s 2012). The installation service targets various customers. Customers in the older group and also people who are not DIY (do- it- yourselfers) as well as women and people on the go, which have no time. Lowe’s carries numerous brands in each product groups recommending...
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..."The Home Depot NYSE: HD, headquartered in Vinings, Georgia, is a home improvement retailer that aims for both the do-it-yourself consumer and the professional in home improvement and construction. It is the second largest retailer in the United States, behind Wal-Mart; and the third largest retailer in the world, behind Wal-Mart and French company Carrefour. The Home Depot operates about 1,900 stores across North America. The company operates stores in the United States (including the 50 states, Puerto Rico, the United States Virgin Islands), Canada, and Mexico. The Home Depot also operates EXPO Design Center stores in select U.S. markets, providing high-end home design products and services. Its 2004 sales totaled US $73.1 billion. It was ranked #13 on FORTUNE magazine's FORTUNE 500 The Home Depot also owns a chain of higher-end home decorating and appliance stores. The Home Depot employs over 325,000 people." The company was founded in 1978 in Atlanta, Georgia by Bernie Marcus and Arthur Blank, and grew rapidly, with sales topping $1 billion annually by 1986. From the moment of its foundation, HD has continued to grow constantly by targeting strong markets with many new homeowners and young people such as New Orleans. Home Depot managed to grow fast by quickly adapting to change and continued to be successful by holding fast to the culture and values of the organization. The constant renewal and the work to sustain culture that produces good products, employees, and customers...
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