With the announcement this week of second-quarter sales and earnings results, Lowe’s Companies, Inc. CEO Marvin Ellison said hourly front-line associates will receive $55 million in bonuses.
According to Lowe’s, the business employs approximately 300,000 associates. The home improvement retail company did not announce how much each employee is expected to receive.
“I’d like to thank our associates for their continued hard work and dedication,” said Ellison, who noted that the bonuses are intended to help Lowe’s staff through the current period of high inflation.
During the 12-month period ending in July, inflation in the U.S. increased by more than 8%. However, inflation remained flat from June to July.
While bonuses may help Lowe’s employees deal with inflation, Larry Harris – a chaired professor of finance at USC Marshall School of Business – told CBS News that salary or wage raises would be even better if Lowe’s aim is to retain employees amid tight labor market conditions.
According to the Economic Policy Institute non-profit think tank, “a crucial measure of how far from full recovery the economy remains is the growth of nominal wages.” Although wages have also increased, they have not increased as much as inflation, per a July report from the Bureau of Labor Statistics.
At the same time as it announced the bonus plan, Lowe’s reported lower sales than it had predicted.
“I am pleased that our team drove operating margin improvement and effectively managed inventory despite lower-than-expected sales – a clear reflection of our relentless focus on operating discipline and productivity,” Ellison said.
Per the Wednesday earnings report, Lowe’s reported net earnings of $3 billion, which was in line with prior-year results. Total sales were $27.5 billion for the second quarter of this year, compared to compared to $27.6 billion in the second quarter of 2021, a 0.3% decrease in total comparable sales.
A full year outlook provided by the company showed that during this 53-week year (compared to a 52-week year in 2021), total sales are estimated at $97 to $99 billion.