How will the opening of Lowe's 130,000‑sq‑ft store in Phoenix affect Lowe's (LOW) same‑store sales growth forecasts?

Impact on Same‑Store Sales Forecasts

The 130,000‑sq‑ft flagship opening in Phoenix is a new‑store addition, so it does not directly feed into Lowe’s (LOW) same‑store‑sales (SSS) metric, which only measures stores that have been open at least one year. Consequently, the current SSS growth guidance (typically 3‑4 % FY‑24‑25) is unlikely to be revised solely because of this single opening. However, the size and location of the store—situated in a high‑traffic, mixed‑use “South Bridge Marketplace” anchored by ALDI—signals strong demographic demand and a “golden‑zone” footprint that management can use to extrapolate future SSS trends. Analysts often view a new flagship as a leading‑indicator of regional demand; if the store quickly exceeds traffic expectations, analysts may upgrade the forward‑looking SSS outlook for the broader Phoenix market and for other similarly‑sized stores in comparable growth corridors.

Trading Implications

Fundamentals: The new store adds roughly $100 million‑plus of annual sales potential (based on Lowe’s average $800‑$900 per sq ft annual revenue). While this lifts total revenue, the incremental effect on EPS and free cash flow is modest (≈0.5‑1 % of FY‑25 guidance). The market‑sentiment score (70) is bullish, suggesting investors already view the development favorably. If management cites the Phoenix store as evidence of strong “core‑plus” expansion, analysts may raise FY‑26 revenue and EPS forecasts by 1‑2 %, which could lift the stock modestly (5–8 % upside target) given Lowe’s 12‑month price‑to‑earnings ratio (≈10‑11×) still below peer Home Depot.

Technical: LOW is currently trading near its 50‑day EMA with modest upside momentum. Breaking above the recent high (~$260) could trigger a short‑term breakout, while a break below the 20‑day EMA (~$250) may trigger profit‑taking. Volume spikes accompanying the news suggest a short‑term bullish bias.

Actionable Insight

- Buy on pull‑back: If LOW retraces to the $250–$255 range with volume support, consider entering a modest long position (target $280–$285) on the expectation of a modest EPS upgrade and continued sector‑strength (housing starts, DIY demand).

- Risk: The upgrade is contingent on the store’s performance and broader macro (interest rates, housing market). Keep a stop‑loss ~3 % below entry. If the stock cracks below $245, the bullish case weakens, and a short‑term correction may be underway.