American retailer Lowe's Companies, Inc. has reported better-than-expected second-quarter earnings thanks to an increase in revenues as a result of growing demand for its home-improvement products as more people took on DIY projects and home renovations during coronavirus lockdowns.
The company reported a 30 percent rise in its revenues and a 68.7 percent jump in profit compared with the same period last year. Revenues for the period were $27.3 billion. The average expectation from analysts was $24.27 billion. Profit grew to $2.83 billion - or roughly $3.74 per share. Expectations were for $2.95 a share.
Same-store sales growth for the period was 35.1 percent compared with the 16.3 percent expected by analysts. Sales generated from e-commerce rose by about 135 percent as the health crisis forced customers to shop online.
Lowe's bottom line benefited from people forced to scale back on vacations and dining out during the health crisis, chief executive officer Marvin Ellison said. A growing number of people during the three months in review chose to invest in their homes - leading to an increase in sales of the company's home-improvement products, he said.
Some families chose to spend savings to renovate or remodel kitchens and other rooms instead of going on a holiday, Ellison said. The trend was apparent in Lowe's customer data for the period that indicated a dramatic shift in spending behavior, he said.
Lowe's attributed some of its success during the quarter to the result of its prior investments including spending on digitizing the business and a revamp of its website and e-commerce services. During the pandemic Lowe's offered free delivery and curbside pickup - allowing consumers to continue buying its products despite nationwide lockdowns.