Fix

Lowe's rides on "House Hype" to soaring quarterly sales: the DIY renaissance

Thursday, May 21, 2020 by Snacks
_It's like DIY Christmas_

It's like DIY Christmas

The "House Hype" is real... Not to be confused with Tik Tok-famous Hype House, where teens with millions of followers dance in bathrooms. The "House Hype" refers to the period of time during which we realized we'd be spending all our waking and non-waking hours in one place: the house. One beneficiary of that period was Lowe's — the big home improvement retailer is doing the Renegade dance to some hype-y numbers:

  • Sales surged 11+% for the quarter as locked down people finally got around to fixing that door handle that's been loose for 12 years. "BRB honey, emergency Lowe's run for more decorative pillows" — the consequences of boredom (see: frog bread).
  • Online sales jumped 80%, as Lowe's pivoted to ecommerce — it rolled out curbside pickup to accommodate online demand, and its website saw triple-digit traffic growth in April.
  • Profit popped 28% compared to last year, as people realized the best time to DIY-home improve is when you're home 24/7.

But... Lowe's earnings probably would have looked very different (read: bad) if it wasn't blessed with an "Essentials Club" membership. Some retailers got it (cough, Walmart), some didn't (cough, Kohl's).

THE TAKEAWAY

The House Hype might be over... Lowe's CEO warned that such high sales growth likely isn't sustainable, and that sales could be moderate going forward (Lowe's stock dropped 4% — there's only so many times you can repaint a kitchen). That's the challenging part of success: it makes it harder to impress investors in the next quarter. Plus, if the housing market suffers on the currently staggering unemployment rate, Lowe's may too.

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