In January, Lowes appointed two new Board members after activist hedge fund D.E. Shaw revealed an effort in the retailer,…
In January, Lowes appointed two new Board members after activist hedge fund D.E. Shaw revealed an effort in the retailer, concerned about his performance in relation to his peers. In May, Ellison named its CEO. Ellison had been working at Home Depot for more than 12 years before his last position as CEO of JC Penney.
“Today’s announcement that Lowes closes 51 underperforming stores is not surprising and, in our opinion, it can propose the beginning of a broader initiative to improve profitability through rationalization of real estate,” wrote Zachary Fadem at Wells Fargo on Monday.
“We suspect that the 51
stores are closing losing money, being cannibalized by other Lowes stores or facing increased competition by Home Depot and others,” added Fadem. He expects investors to get more clarity about the plans when it meets investors on December 12.
“The number of closures announced this morning is not significant but still symbolic of the upgraded management team which reviews all causes of underperformance and a renewed sense of urgency,” noted Jonathan Matuszewski at Jefferies.
The shares in Lowes were less than 1 percent in the afternoon trading, giving a market value of 79 billion dollars. The share has increased by approximately 24 percent over the past year.
Home Depot, however, increases market capitalization of $ 207 billion, but the share has only increased by 10 percent over the past 12 months.