Lowe's Plans Customer Support Center - Analyst Blog

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It goes without saying that customer service is of utmost importance for any company to run its business. Following this rationale, Lowe's Companies Inc . ( LOW ) recently announced its plan to open a new Customer Support Center in Albuquerque, New Mexico.

Lowe's added that the new center will be operational in the first quarter of 2012. The center will generate a total of 600 jobs by the end of 2013 of which 250 jobs will be created within March 2012.

Moreover, the new center will supplement the company's present customer care centre in Wilkesboro, North Carolina. In addition, it will also offer numerous support functions to stores, internet sales as well as provide repair services to its customers.

The company remains on track to develop innovative ideas to adapt to the ever changing demands and preferences of its consumers.

Lowe's boasts a proven strategy of investing in stores to enhance customer-shopping experience by improving point-of-sale and directional signage while adding more product selection. The company's sustained focus on price discounts and other initiatives have helped it to boost its market share.

Lowe's, which faces stiff competition from The Home Depot Inc . ( HD ), is also rationalizing its capital expenditures to improve its return on investment.

Further, Lowe's stood by its earlier guidance and expects earnings between $1.57 and $1.60 per share in fiscal 2011, excluding charges of $0.20 related to store closings and discontinued operations

Total sales are expected to increase in the range of 2% to 3%, while comparable store sales are anticipated to inch down approximately 1%.

On a reported basis, including one time items, operating margin is expected to contract 80 to 90 basis points. However, excluding the charges related to store closings and discontinued operations, operating margin is expected to remain flat or decrease by 10 basis points.

Lowe's in a strategic move has closed 20 underperforming stores across 15 states in the U.S. in October 2011 as the company dipped investments in sections of the business that no longer contributes significantly to its growth.

The company is also cutting new store growth targets, given the sluggish consumer environment and the trends in the housing market. Lowe's opened 42 stores in 2010, significantly down from 62 stores opened in 2009 and 115 stores opened in 2008. The company now expects to open 25 new stores during fiscal 2011.

Currently, we have a long-term Neutral rating on the stock. Moreover, Lowe's holds a Zacks #3 Rank, which translates into a short-term Hold rating.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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