Lowe's said it is pivoting from catch-up mode to accelerating plans to grab market share from rivals, after working for the last two years on its turnaround efforts.
At a Wednesday investor conference, CEO Marvin Ellison said the retailer has overhauled its website and added new signs to help customers navigate its stores. He said it will now focus on strategic moves to win more of the approximately $900 billion U.S. home improvement market.
"Our commitment to retail fundamentals has been essential to our 2020 financial success," he said. "Our supply chain, in-store and digital systems would have collapsed under the weight of the unprecedented customer demand created by the pandemic without this focus."
He said "the best days at Lowe's are still in front of us," as the company gets a boost from the popularity of home improvement projects during the coronavirus pandemic and capitalizes on its e-commerce investments.
The home improvement retailer reiterated its outlook at the investor conference, saying it expects sales to grow by about 22% this year. Same-store sales are expected to rise by about 23% during the same period, helping it to earn between $7.53 to $7.63 per share, the company said. After adjustments, Lowe's forecast earnings of $8.62 to $8.72 per share in fiscal 2020.
The company didn't provide an outlook for next year, which is fiscal 2021.
Lowe's shares closed Wednesday up nearly 6% to $160.13. Its stock has gained about 33% so far this year, bringing the company's market value to $117.3 billion.
At the investor meeting, Ellison highlighted improvements that the retailer has made across its brick-and-mortar and digital businesses since he took the helm two years ago. Among them, it's launched a loyalty program to win more business from home professionals, such as electricians and contractors. It made its website easier to navigate and better able to handle traffic. And it's added new digital fulfillment options, such as curbside pickup and in-store lockers.
He said the company has come a long way from Black Friday 2018 when its website crashed. Now, he said, the retailer is handling a surge in e-commerce demand day after day because of the pandemic.
In the year ahead, he said the company will have a "total home" strategy. It will expand its online only assortment from kitchen appliances to home decor. It will test ways to speed up and lower the cost of fulfilling online orders by freeing up more space in the back of its stores. And it will localize products on shelves in different markets, so it doesn't have snow blowers at stores in warm climates or riding lawnmowers in big cities.
Lowe's Chief Financial Officer Dave Denton said its efforts in the months ahead will lift the company's sales per square foot. He said it expects to have $423 per square foot by the end of this year and it will raise its goal to $460 for the future.
"2020 was a pivotal year for the company," he said. "We are taking market share earlier than we expected and we are making the right investments for future growth."
The company's board authorized a $15 billion common stock repurchase program.
Correction: Lowe's said it expects sales to grow by about 22% in fiscal 2020. An earlier story said the outlook was for fiscal 2021.