Lowe’s to ditch Mexico stores in further streamlining
By Aishwarya Venugopal - Nov 21st 2018, 11:23
Lowe’s stated it was looking to shed its retail operations in Mexico and certain noncore US businesses as the country’s second-biggest home improvement chain strives to compete with rivals including Home Depot.
The share price of the company based in Mooresville, North Carolina, fell 5.3% to $86.50 in premarket trading after Lowe’s also reported a smaller-than-expected rise in same-store sales.
Under Marvin Ellison, Lowe’s new CEO, the company has been streamlining its business by shutting underperforming stores and cutting back on slow-moving inventory.
The company has perennially lagged Home Depot in same-store sales, despite having about the same number of stores.
Lowe’s said it was looking at all options for its chain of 13 stores in Mexico and that it was “exiting” its US contracting services business Alacrity Renovation Services and security and smart home app Iris Smart Home.
Earlier in November, Lowe’s announced the closure of 51 underperforming stores in the US and Canada, which followed the shutdown of 99 Orchard Supply stores in California.
“With our strategic reassessment substantially completed, we can now intensify our focus on the core retail business,” said Ellison. "Our transformation will take time.”
Lowe’s net earnings fell to $629m, or 78c per share, in the third quarter ended November 2 from $872m, or $1.05 per share, a year earlier.
The company’s results included $280m in pretax charges.
Sales at stores open for more than a year rose 1.5% in the third quarter, versus expectations of a 2.93% increase, according to IBES data from Refinitiv.
Ellison blamed the assortment of merchandise at stores and the inability to restock shelves with the right kind of inventory for poor sales.
The company cut its forecast for full-year sales growth to about 4% from 4.5% and says it expects comparable sales to rise about 2.5%, compared with 3% estimated previously.
Excluding certain items, Lowe’s earned $1.04 per share, beating estimates of 98c. While, net sales rose nearly 4% to $17.42bn, edging past expectations of $17.36bn.Business Live
South Africans are spending less on their weekly shopping trip
23/05/2019 - 09:44
Tiger Brands, which carries brands including Koo canned foods, All Gold, and Tastic rice, said that revenue from continuing operations fell 2% to R15.4 billion in the interim period.
Bidcorp expects higher food inflation in SA
23/05/2019 - 09:16
Global food-services group Bidcorp expects rising food price inflation in SA, where food producers and retailers are grappling with higher costs and low selling price increases.
Pick n Pay's partner Velokhaya expands to include feeding scheme for 200 children daily
21/05/2019 - 15:50
Almost 500 Pick n Pay Head Office employees – in partnership with Mellon Educate – volunteered their time and skills to build a kitchen and dining area at Velokhaya Life Cycling Academy in Khayelitsha last week. With this new facility, Velokhaya will launch a daily feeding scheme for around 200 children.
Nike and Adidas join 173 US shoe retailers in call to avoid ‘catastrophic’ tariffs
21/05/2019 - 12:23
Nike, Adidas, and other footwear giants urged President Donald Trump to reconsider his tariffs on shoes made in China, saying the policy would be “catastrophic for our consumers, our companies and the American economy as a whole”.
US jealousy sparked trade wars, says Chinese ambassador
21/05/2019 - 10:48
The US is jealous of China’s rapid economic growth and achievements in the past few years and was using the trade wars to frustrate and stall it, Lin Songtian, the Chinese ambassador to SA said.