Page 30 - HW December 2019

global eyes
Mixed US home improvement third quarter results
WITH THE ALL-IMPORTANT last quarter still ahead, The Home Depot took
the conservative path and lowered its guidance while Lowe’s did the opposite.
Home Depot disappoints – Despite posting gains all round, The Home Depot’s Q3 of FY2019 disappointed pundits and investors.
The big orange sheds saw sales of US$27.2 billion (+3.5%) with comparable sales +3.6% (+3.8% for just the US stores).
Craig Menear, Chairman, CEO and President, said the Q3 results “reflected broad-based growth across our business, yet sales were below our expectations driven by the timing of certain benefits associated with our One Home Depot strategic investments.
“We are largely on track with these investments and have seen positive results, but some of the benefits anticipated for fiscal 2019 will take longer to realize than our initial assumptions.”
As a result, the company downgraded its FY2019 sales guidance again (having already done so with its Q2 numbers), expecting sales to grow by approximately 1.8% (prior guidance was +2.3%) and compsalestoincreaseapproximately 3.5% (was +4%).
www.homedepot.com
Lowe’s concern for Canada – Lowe’s Q3 sales were US$17.4 billion with consolidated comparables +2.2% and US comps +3%.
The bottom line was impacted by US$53 million in non-cash pre-tax charges from a strategic review of underperforming Canadian operations, the result of which will be implemented in Q4, comprising:
• Closing34underperformingCanadian stores.
• Simplifying its multiple Canadian store banners.
• ReorganisingtheCanadiancorporate support structure.
• Rationalisingandcoordinatingthe Canadian product assortment. Marvin Ellison, President and CEO,
said of the numbers: “Although we still have work to do, I am confident we are on the right path to build a better Lowe’s and generate long-term profitable growth.
“We are committed to the Canadian market and are taking decisive action
to improve the performance and profitability of our Canadian operations.”
He also talked of the need to “repair” the Lowes.com business, the reasons for which are unclear to us at this time.
Overall, however, Lowe’s was pleased with its Q3 performance in the US, at both the top and bottom lines, and as
a result has raised its guidances for the year.
For FY2019, total sales are now expected to be +2% with comparable sales +3%.
www.lowes.com
Ace aces its Q3 – In contrast to the slightly disappointing Q3 results above, Ace Hardware talked it up with more “record” numbers with Q3 FY2019 revenues of US$1.53 billion (+7.2% thanks in part to 81% top line growth from Acehardware.com) and same store sales +3.4%
John Venhuizen, President and CEO, said of the result: “In addition
to record revenues and profits, we are also proud that our stores continued growth has moved Ace into fifth place on the Franchise Times Top 200 behind companies like McDonald’s, KFC and Burger King. Ace is the only non-food brand in the top five.”
www.acehardware.com
28 NZHJ | DECEMBER 2019
MORE AT www.hardwarejournal.co.nz