The Buzz
Lowe's struggles against Home Depot
May 22, 2013: 1:14 PM ETClick the chart to track shares of Lowe's.
As the housing market heats up, so is competition among home improvement retailers.
A day after Home Depot (HD) delivered earnings and revenue that were much better than forecasts and raised its guidance, Lowe's (LOW) reported a weaker-than-expected quarterly profit for the first-quarter on declining sales.
Lowe's CEO Robert Niblock blamed "cooler than normal temperatures and greater precipitation" for the soft sales figures. In contrast, Home Depot CEO Frank Blake said his company continued to "benefit from a recovering housing market" despite the fact that there was "less favorable weather" during the quarter.
The contrasting results gave traders on StockTwits plenty to chat about.
LDrogen
$HD really took $LOW to school this quarter, completely divergent reports.
silverjet2
$LOW needs to improve its shopping experience rather than blame the weather for its missed earnings report
That's a good point. It's not the first time Lowe's has underperformed Home Depot, so bad weather isn't the primary problem. Same-store sales, which measure sales at stores open at least a year and are a key gauge of health among retailers, have been weaker at Lowe's than they have been at Home Depot each quarter for the past several years.
retail_guru
Lowe's is just plain lucky direct peer is Depot. $HD stellar performance keeps dragging $LOW stock up with it, despite some seriously bad Qs.
A lucky break indeed? Despite the lackluster performance, shares were of Lowe's rose 1% Wednesday, just behind Home Depot's 3% increase. Year-to-date, Home Depot shares of climbed almost 30%, while Lowe's shares are up a healthy 20%.
Related: The market doesn't lie. Housing recovery is real
In addition to the two home improvement retailers, Toll Brothers (TOL) was also in focus Wednesday after announcing strong results, thanks to accelerating demand for houses and higher home prices.
Shares of the luxury homebuilder jumped 7% Wednesday.
timeday
$TOL rocking housing helping banks rip higher big hedge funds own the BANKS will rip higher $SPY
lamonicabuzz
Toll House Rally. Builder $TOL reports profits and revenue that beat forecasts. More good news for housing. $TOL up 4% pre-market.
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The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.
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The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, and Abbott Laboratories, La Monica does not own positions in any individual stocks.
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