MOORESVILLE, N.C. & ATLANTA ― The two largest home improvement retailers in the world reported their first-quarter financials last week, with positive results from both companies, despite a slow start to the year due to wet weather through much of the U.S.

Lowe’s Cos. reported net earnings of $1 billion for the quarter, up from earnings of $988 million for the same period last year. Sales for the quarter rose 2.2% to $17.7 billion, from $17.4 billion a year ago.

At Home Depot, first-quarter profit and revenue exceeded analyst expectations while same-store sales missed estimates, weighed down by damp weather and an additional week in the previous fiscal year. Earnings rose from $2.4 billion to $2.51 billion and net sales increased by 5.7% to $26.38 billion, compared to $24.95 billion a year ago.

Weaker prices for lumber products compared to a year ago had an impact on the results for both companies. Lowe’s President and CEO Marvin Ellison also laid some blame on inefficiencies within the company’s back end, as well as the need for its merchandising teams to adjust to their new roles following significant reshuffling over the past six months.

Lowe’s announced the acquisition of a retail analytics platform from Boomerang just two days before the release of its Q1 results, considered a step toward improving the back end.

Home Depot’s comparable store sales rose by 2.5%, while Lowe’s comps were up 3.5%―and up 4.2% for its U.S. home improvement business. Comp sales for Lowe’s Canada were negative and were blamed on the softening housing market in this country.

Lowe’s previously announced its intention to exit its Mexico retail operations and had planned to sell the operating business. Following a market evaluation, however, the decision was made in the first quarter to instead sell the assets of the business, resulting in an $82 million tax benefit.

For the year, Home Depot forecasts a sales increase of 3.3% and comp sales up about 5%. Lowe’s expects sales and comps to increase by about 2% and 3% respectively for fiscal 2019.

TORONTO ― Canadian Tire Corp. saw its Q1 profits decline to $69.7 million, or $1.12 per share, compared to $78 million ($1.18) a year ago. However, revenues ticked up to $2.89 billion, from $2.81 billion in Q1 of 2018. The sales increase at the Canadian Tire banner was healthier, rising by 7.4%. Comparable sales climbed by 7.1%.

The latest reporting period marks Canadian Tire Retail’s 20th straight quarter of topline sales growth, despite a mild December and a slow start to January that hampered sales for the beginning of the year.

However, much of that strong Q1 growth was driven by automotive service, up 9%, and especially the sale of snow tires.

Online sales growth contributed to the company’s first-quarter results, as well. Canadian Tire rolled out a deliver-to-home program six months ago. According to CEO Stephen Wetmore, the process has generated some interesting insights. “First, our best in-store customers are also our best e-commerce customers. It’s a great starting point for our strategy to build a true omnichannel experience focused on growing the customer, not the channel,” he said in a call to analysts.

He added that the sheer number of Canadian Tire stores across the country will serve as an effective distribution network for deliver-to-home, especially when it comes to large items and bulk purchases.

Canadian Tire has been investing heavily in its digital platforms, as well. The company now has close to 170 people working on its website and digital properties, up from 50 people previously.

BOUCHERVILLE, Que. ― BMR Group earlier this month held the official opening of its first store in Ontario under the BMR Pro banner, Griffith Building Supply in Greater Madawaska township.

Owners John Lacourse and Derek McGrimmon unveiled the new look of the store. A new 2,000-square-foot area has been built to store more products and offer an expanded line of materials. “We are very happy, and especially very proud, to open the first BMR Pro store in Ontario,” said Pierre Nolet, BMR’s VP of business development, calling the new dealer “an important ally in Ontario.”

The BMR Pro concept offers a range of services and products to cater to the specific needs of trades and contractors. While the format can vary according to each dealer and their local market, the concept typically involves:

• around 8,000 square feet of floor space;
• an industrial look and a space tailored to pros;
• business hours starting at 6 a.m.;
• bulk discounts;
• digital terminals with access to BMR’s catalogue;
• online ordering with in-store pick-up;
• a lumber yard with outdoor tills.

Other traditional services remain in place, including on-site delivery, project estimates, cutting, truck fleets, phone-in orders and charge accounts.

The first Quebec store for BMR Pro banner is currently under construction in Trois-Rivières, with an existing BMR dealer, BMR Pierre Naud. That store is expected to open in the late summer.

LONDON ― British big box home improvement retailer B&Q has launched a new smaller store concept to offer its customers a more convenient way to shop for home and DIY products. It’s also being tested as a way to establish convenience hardware retail in a densely populated urban location.

Called GoodHome by B&Q, the store is in Southwest London, just outside Croydon, and marks a departure from the DIY chain’s larger footprint. The new concept is just 5,400 square feet in size, with 1,615 square feet devoted to retail selling space. It carries about 6,000 SKUs.

That’s significantly smaller than a big box B&Q, which typically weighs in at 100,000 square feet and 40,000 SKUs. However, the core range of products will also be available for same-day delivery, with an extended range of more than 20,000 additional products available for next-day in-store or home delivery.

Products are not stocked in the store in a traditional manner. Customers have the choice of buying items using in-store digital screens or through a dedicated B&Q app. They can then go to a checkout counter to collect their purchases. Click-and-collect orders can be ready in five minutes, the retailer claims.

Customer service plays an important part in the strategy of the Goodhome concept. A staff of trained associates is on hand to answer questions and help customers complete their project purchases.

At Shnier, the Brampton, Ontario-based flooring company, Tammi Tremble has added the role of director of marketing to her existing title as director of national accounts.

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HIGH LEVEL, Alta. ― The local Home Hardware Building Centre and Co-op Cardlock are among businesses remaining open to serve firefighters after about 5,000 residents evacuated this northern Alberta community last week. The mandatory evacuation order was issued as the wildfire reached within five kilometres of High Level. Firefighters from across the country were rallying this past weekend to help battle the blaze.

BOUCHERVILLE, Que. ― A new RONA Deslongchamps store has opened in the Algonquin community of Kitigan Zibi, near Maniwaki, Que. The store is dealer-owner Éric Deslongchamps’s first in the Gatineau Valley, joining his locations in Rivière-Rouge and Mont-Laurier in the Upper Laurentians.

SASKATOON ― Federated Co-operatives Limited has reached an agreement with Terra Grain Fuels to purchase TGF’s ethanol plant near Belle Plaine, Sask. The acquisition will position local co-ops to provide renewable fuels to their members and to prepare for the impending national Clean Fuel Standard.

MOORESVILLE, N.C. ― Lowe’s Cos. Has acquired the Retail Analytics platform from Boomerang Commerce, based in Mountain View, Calif. The platform processes product and pricing data sets to guide pricing and merchandise assortment decisions.

OAK BROOK, Ill. ― Ace Hardware Corp. reported record first-quarter revenues of $1.38 billion, an increase of 5.1% from the first quarter of 2018.  Net income almost doubled to $22.6 million, driven by revenue growth and the timing of vendor funds earned. Comp sales were up 3.9%. The company added 21 net new stores in Q1.

SUPPLIER NEWS

MISSISSAUGA, Ont. ― M-D Building Products has moved to a new retail distribution centre. Shipping from the facility began on May 10. Its capacity is more than five times that of the previous distribution centre. It will also house the company’s retail customer service team and sales and marketing department, along with its new, expanded Prova training centre. With the move, M-D consolidates its previous third-party logistic facilities into a single company-owned centre.

OTTAWA ― The Department of Natural Resources has announced the winners of the 2019 Energy Star Canada Participant Awards, “for helping Canada build a clean energy future and address global climate change.” Manufacturers of the Year include Samsung Electronics Canada (in the appliances category), Centennial (for windows and doors), Venmar Ventilation for HVAC and L’Image Home Products for lighting. Now in their 16th year, the awards recognize companies that have demonstrated excellence in promoting the most energy-efficient products and new homes in Canada. The Home Depot Canada was named National Retailer of the Year.

TOLEDO, Ohio ― Corporate Responsibility magazine has named Owens Corning number one on its 100 Best Corporate Citizens list for 2019. This is the fifth year in a row Owens Corning has been named to the list: last year, it ranked third. The 100 Best Corporate Citizens ranking is based on 134 corporate disclosure and performance factors in seven categories: climate change, employee relations, environment, finance, governance, human rights and stakeholders and society. Other firms making the list this year are 3M Co. (at number 22) and Weyerhaeuser (number 59).

VANCOUVER ― West Fraser Timber Co. has announced it will curb production for about two weeks at its Chasm and 100 Mile House, B.C., sawmills. The company made the call in the face of weak lumber pricing, high log costs and a squeeze on timber supplies. In addition to curtailments already announced, SPF lumber production is expected to fall by some 20 million board feet.

ECONOMIC INDICATORS

U.S. housing starts rose by 5.7% to a seasonally adjusted annual rate of 1.235 million units in April, with gains in both the single- and multi-family residential segments. Drier weather and falling mortgage rates reportedly contributed to the growth. (U.S. Commerce Dept.)

U.S. retail and food services sales dropped 0.2% to $513.4 billion seasonally adjusted in April from the previous month. However, sales were up 3.1% year over year. Total sales from February to April were up 3.0% from the same period a year ago. (U.S. Commerce Dept.)

NOTED

Canadian Tire Corp. has reached the first anniversary of the launch of its Triangle Rewards program. According to CEO Stephen Wetmore, more than 50% of customers at Mark’s Work Wearhouse, SportChek and Canadian Tire are using the loyalty program, representing 100 million transactions over the past year.

OVERHEARD...

“One of the key components of our transformation here at Lowe’s is to modernize our technology. Pricing and assortment planning have been identified as strategic areas in need of modernization. And when we find the right assets available to buy and advance our strategy, we’ll do that.”
―Seemantini Godbole, Lowe’s chief information officer, on the company’s acquisition of new technology to help it with, well, pricing and assortment planning.