Lowe's says it will invest $1.7 billion in its supply chain over the next five years

Lowe's Cos. is currently undergoing a transformation that includes a $1.7 billion investment in its supply chain, according to Marvin Ellison, the home improvement retailer's chief executive. Speaking on the earnings call on Wednesday, Ellison said the investment will help with the changes being made to the e-commerce site. Growth in the online channel has been slowed in order to modernize the site, Ellison said. "Getting digital right is critical if Lowe's is to generate higher growth, if only because increasing numbers of consumers start their journey by researching online and many more are now ordering online too," said Neil Saunders, managing director at GlobalData Retail. Lowe's reported fourth-quarter earnings and revenue that beat expectations but guidance fell short. Among the factors, Ellison blamed marketing missteps during the shortened shopping season, including a failure to "fully capitalize on demand for appliances among other key categories," according to a FactSet transcript. Appliances were an area of strength for Lowe's biggest competitor, Home Depot Inc. . "We prefer Home Depot for its high level of consistency and strong execution," said Raymond James in a note. Raymond James rates Lowe's stock market perform. Lowe's shares have fallen 12% for the week so far, but shares are up 2.4% for the past year. The S&P 500 index has gained 9% over the past year.

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