Aug. 22 (UPI) -- As it shared a strong second quarter sales report, hardware chain Lowe's announced Wednesday it would close its Orchard Supply stores.
The company decided Friday to close Orchard Supply Hardware stores, which Lowe's acquired five years ago, to focus on its core home improvement business, it said Wednesday. The plan is close all 99 Orchard Supply Hardware stores, located in California, Oregon and Florida, as well as the distribution facility that services those stores, by the end of the 2018 fiscal year.
"While it was a necessary business decision to exit Orchard Supply Hardware, decisions that impact our people are never easy," Ellison said. "We will be providing outplacement services for impacted associates, and they will be given priority status if they choose to apply for other Lowe's positions."
Also Wednesday, the company shared its second quarter sales increased 7.1 percent from the same period last year to $20.9 billion.
As the second quarter earnings were posted, shares of Lowe's increased 8.4 percent in Wednesday morning trade, the Wall Street Journal reported.
Lowe's also reported net income of $1.5 billion and $1.86 a share for the quarter that ended Aug. 3, compared to $1.4 billion net income and $1.68 a share in the second quarter of 2017. The report included a $230 million charge related to the reassessment of Orchard Supply Hardware stores. Excluding this charge, profit increased to $2.07 a share from $1.57 a share.
Still, sales lag behind competitor Home Depot, which reported last week that its second quarter sales rose 8.4 percent from the second quarter of last year to $30.5 billion.
"We posted solid results this quarter by capitalizing on delayed spring demand," Lowe's CEO Marvin Ellison's statement said. "We are committed to driving even stronger performance in the future by sharpening our focus on retail fundamentals and by limiting any projects and initiatives that take us away from our core mission of being a great omni-channel home improvement retailer. I would like to thank our associates for their hard work and commitment to the company."