Lowe's CEO sees no end to plywood price increases
Reuters, 03.30.04, 3:44 PM ET
ATLANTA, March 30 (Reuters) - The chief executive of home improvement retailer Lowe's Cos. (nyse: LOW - news - people) said on Tuesday that he does not expect plywood prices, which are up more than 100 percent in the past year, to decrease.
"I don't think you'll see plywood prices come back down," Robert Tillman told a New York consumer conference in remarks carried over the Internet. "The supply is now pretty well managed. There's not an oversupply. There are fewer manufacturers."
Tillman said prices of other wood may fluctuate.
Lumber prices, specifically plywood and other structural panels used in home construction, have doubled or tripled year-earlier values since at least last autumn, and both Lowe's and home improvement industry leader Home Depot (nyse: HD - news - people) said higher prices aided their fourth-quarter sales.
Lumber accounts for about 8 percent of Lowe's revenue and 7 percent of Home Depot's, according to Lehman Brothers.
Tillman, the architect of Lowe's expansion to big U.S. cities such as New York, also noted rising costs of other materials such as copper, electrical cable and steel.
"We're seeing some rumblings in the marketplace because of high energy costs about potential price increases downstream and of course we're not taking any price increases," Tillman said. He said many manufacturers Lowe's works with have locked in their rolled-steel prices.
During a question and answer session, Tillman also said no decision has been made on when he might step down from Lowe's as chairman and CEO. He turns 61 this year.
"My brain is fortysomething, my body is sixtysomething. So there'll be a time when I need to step aside," Tillman said. "But there's been no decision made about when that will occur."
Tillman said Lowe's had a strong management team that includes Robert Niblock, the former chief financial officer who was named company president early last year.
"Robert Niblock could replace me tomorrow morning," Tillman said.
In afternoon New York Stock Exchange trading, Lowe's shares eased 60 cents to $55.96, while Home Depot stock was up 14 cents to $37.44. |
