Lowes SWOT analysis

Strength

Strengths

22% increase in sales of lumber and building materials

Efficient supply chain that routes nearly 80% of merchandise through 15 distribution centers

Second largest home improvement retailer with revenues of $59074 million

Shares grew by 30.7% by the end of 2017

69% full time employees vs 59% FTE of competitor Home Depot

long-term debt/ capital 0.695

Operating expenses increased only 1.23 %

Current ratio of 1.056 by the end of 2017

5.5% increase in total revenues

11.5% increase in net income

Weakness

Weaknesses

Around 92% of total revenues from US

Only 30% of customers are pros

70.67 days payable outstanding

Debt equity ratio 2.44

Inventory turnover 4.14

Shareholder equity down 1.2B

Retained earnings down 11.5%

Total equity down 10.3%

PEG ratio 2.44

Lowes total return us 11% less than competitor Home Depot

Opportunity

Opportunities

Increase revenue from professionals, currently at 30%

Housing starts are predicted to increase from 1.2M to 1.4M

Technology improvements leads to new appliance purchases, expected to grow 4-7% by 2022

Smart home product demand increased 62%

Improved paint center options, partnership with Sherwin-Williams

Increase in immigrant population which increases the need for new homes and improvements

Acquisition of Central Wholesalers and RONA, this will make Lowes largest home improvement in Canada

E-commerce grew by 15.2% since 2015

Expansion into other countries outside of North America, relaunch Mexico stores

Natural disasters create hardware and home improvement needs

Threat

Threats

Availability of home loans, banks are not lending to applicants with low credit scores

Lowe's has 1,813 store while Home Depot has 1,994

Federal minimum wage continues to increase

Less international presence than Home Depot, Lowe's has 10 stores in Mexico HD has 125

Unemployment rate of 3.7% can decrease sales and demand for home improvements

Supply chain interruptions

Since 2017 the amount of home improvement store increases 3.8% annually

Increasing costs on products and fixed expenses, diesel is up 42.8%

Home Depot revenue was $148B and Lowe's was $95B

Previous security breach that affected up to 35,000 customers

What are the SO, ST, WO, and WT strategies for Lowes?