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.
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.
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%.
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.
By Lee Munson
There is a feeling out there by some in the financial media that small-time investors are getting back into the stock market at the worst possible time. They -- or 'them' -- think this is entirely predictable and repeatable mistake.
I get it: "them" are smart and 'you people' only make mistakes.
Let's look at what's really going on.
First things first: Who said this is the worst possible time to MOREJan 29, 2013 12:46 PM ET
|How much guaranteed retirement income do you need?|
|Nigeria slumps into recession, Norway's economy stalls|
|The streaming music war is getting ugly|
|Eerie quiet: 38 days of near-silence for stocks|
|America's immigrant economy: Strength or weakness?|