As reported by CNBC, the sales outlook of Lowe’s Companies (NYSE:LOW) has deflated investors ahead of a tamer 2022. The home-improvement giant benefited significantly from the DIY boom seen during the pandemic when households started spending on home decor and architecture projects.
Dave Denton, Lowe’s Chief Financial Officer, conceded that the company is getting ready for a “modest sector pullback in 2022” after a year of bonanza further triggered by the government’s stimulus package and a strong real estate market.
Despite the outlook, the company remains positive it will be able to overtake its competitors in the segment to increase its market share, while “for fiscal 2022, Lowe’s said it anticipates same-store sales could drop by as much as 3% or be roughly flat with this year,” CNBC reported.
Refinitiv data states the company’s total sales will be within the $94 billion-$97 billion territory in the next fiscal year. The estimates fall short of analysts’ outlook of $97.64 billion.
Bets Are On
Lowe’s CEO Marvin Ellison painted a positive picture for next year, as the company will launch new brands and boost its e-commerce platform, betting hard on baby boomers by becoming “a one-stop-shop for suppliers.”
Said Ellison:
“We’re making targeted investments to win with the DIY customer across generations of homeowners, across geographies, and across a spectrum of tastes and styles… We’re also investing in the pro to ensure that we have a consistent, competitive offering for this busy customer."
Ellison says the company is bound to capitalize on plenty of economic elements like record-low interest rates, aging homes and consumers’ savings. The company is also lining up a share buy-back of $12 billion in the remainder of 2021 and well into 2022.
While the company is valued at $170.10 billion, its stock is up 57% this year, while shares closed Tuesday at $252.46, down 1.86%.
The CEO said, “We are confident in the long-term growth prospects for the home improvement market and that we are making the right investments to continue winning with both our pro and DIY customers.”