By CultureBanx Team
DIY customers inspired Lowe’s new slogan "Do it right for less"
Lowe’s forecasted same-store sales will increase around 3% in 2019
Lowe's (LOW +0.01%) CEO Marvin Ellison, a veteran of the retailer’s main rival Home Depot (HD -0.06%), is focusing in on their DIY customers with a new slogan "Do it right for less." This slogan is quite reminiscent of Home Depot’s tagline of “More Saving. More Doing.” Is this new slogan for Lowe’s enough to dethrone Home Depot and turn around the second largest home improvement store?
Why This Matters: It’s definitely going to take more than a slogan shift to get sales back on track. In December on Lowe’s Investor day, Ellison commented on the missteps the company has experienced including a website outage during peak Black Friday shopping. “We are running Lowe’s differently and sharpening our focus on retail fundamentals,” Ellison said during the presentation. The company has forecasted same-store sales will increase around 3% in 2019.
Ellison previously worked at Target (TGT +0.39%) and spent a dozen years at Home Depot. He was the first African-American to join Home Depot’s senior ranks and left for JCPenney (JCP +6.10%) after missing out on the top job there. In his role at Penney he was mandated to plug the store’s countless leaks in operations, strategy and technology.
Lowe’s takes in more than five times as much revenue as Penney’s. The struggling retailer was in crisis when Ellison joined, and during his tenure at the company he strengthened its balance sheet by retiring $1.4 billion in debt.
Every analyst on the street hasn’t counted Lowe’s out just yet. “While disappointing Q3 results reinforce the view that considerable issues remain, we are still encouraged that the new leadership is setting the stage for a multi-year turnaround,” wrote Wells Fargo analysts led by Zachary Fadem.
Situational Awareness: Last month Moody's warned that Lowe’s "more aggressive financial policy...will result in significantly higher debt levels and weaker credit metrics and reduces the company's financial flexibility," according to Senior Credit Officer Bill Fahy. The ratings agency did note the company’s earnings, cash flows and liquidity should remain solid as they address various operational challenges.
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