During its third-quarter earnings report Wednesday, Lowe’s Home Improvement announced that it will be offering its hourly employees $55 million in bonuses to help compensate for the still-excessive inflation that has impacted the country throughout 2022.
Even though inflation has eased slightly and gas prices have mellowed of late, these bonuses will help lower-income workers stung by the continuing high price of food and housing. According to Lowe’s spokesperson Steve Salazar, the bonus will be paid to hourly workers on Sept. 9 and taxed, per The Washington Post.
“In recognition of some of the cost pressures they are facing due to high inflation, we are providing an incremental $55 million in bonuses to our hourly frontline associates this quarter,” said Lowe’s CEO Martin R. Ellison at the earnings announcement. “These associates have the most important job in our company and we deeply appreciate everything they do to serve our customers to deliver a best-in-class experience.”
Additionally, in a continuing effort to promote its workers’ work-home life balance, home and hardware giant announced that it will by offering these same workers 20% limited-time discounts on cleaning and household necessities, per NBC.
According to Lowe’s 2020 Annual Report, the company employs over 300,000 workers. Details about how many of them are “hourly frontline associates” and how much of a bonus each will receive are not known.
The same report also noted that Lowe’s made around $90 billion in sales in 2020. Of course, company bonuses are nothing to scoff at, but given the current labor market climate, they are also seen as a corporate device to retain employees.
Speaking to CBS News, USC Marshall School of Business finance professor Larry Harris says that higher wages would provide a bigger incentive for a worker to stay with the company.
“The labor movement is very tight and they’re afraid of losing their workforce,” Harris said. “So they’re providing bonuses, additional benefits, they may increase wages — all this is designed to make it more attractive to remain a worker at Lowe’s.
“I imagine that Lowe’s and other companies who are doing bonuses are not quite ready to raise wages. They’d rather not have to, but they will be forced to if they start losing employees,” Harris added.
Lowe’s Companies Inc. (LOW) reported better than expected earnings surprise for the second quarter during its earnings call Wednesday, according to Nasdaq. At $4.67 per share, the company slightly exceeded Zacks Consensus Estimate of $4.63 per share, a 0.86% price per share increase.
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However, Lowe’s $27,476 million net sales showed a decrease of 0.3% year-over-year and fell below Zacks estimate of $28,195 million. The company’s comparable (same-store) sales also dropped 0.3% in Q2.
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