Is the sky the limit for the home improvement business? (Photo by Justin Sullivan/Getty Images)
Anything Home Depot can do, Lowe’s can do…often better but sometimes just as well.
One day after Depot blew away its financial quarter, not to mention Wall Street analyst estimates, its chief (although smaller) rival Lowe’s had a very similar story to tell about its third quarter.
Sales for the period were up 18% (Depot’s were up 10%), earnings jumped 38% (Depot net was up 20%) and its same store sales were up 2.2% (versus 6.1% for Depot). All these numbers beat analyst forecasts, the same as Home Depot.
And like its rival, Lowe’s upped its forecast for the balance of the fiscal year, indicating it expects the good times to continue for at least the near future.
One more thing the two Big Boxers had in common: Wall Street loved what it heard. Lowe’s stock was up about 4% just before the opening bell on Wednesday, in line with Home Depot’s jump yesterday.
Lowe’s CEO Marvin Ellison said the retailer had strong growth in its business with professional contractors and builders, an area it has been playing catchup in, and that its online sales and home decorating business were both also good contributors.
The pleasant surprises from both retailers come as they increasingly focus on the pro side of the business, figuring that homeowners are starting to max out on smaller home improvement projects. Yet each indicated they haven’t seen overwhelming evidence of that happening yet with their individual do-it-yourselfer sales remaining healthy.
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Lowe’s also said it was targeting the baby boomer generation with a new program called Livable Home aimed at aging seniors who have special home improvement needs, such as grab bars for bathrooms. The initiative is being launched in connection with AARP, the retired persons’ organization.
Whoever the customer and whatever the product, the results from both retailers point to no substantial let-up in the overall home improvement and remodeling business, a sector that some have worried would start to trend down as Americans emerged from their pandemic hibernations and began spending on out-of-home activities. Ellison said Lowe’s “momentum continued” and he expects further gains in market share and profitability based on new internal measures.
The home improvement business just continues to improve.
