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.
Shares of homebuilders rallied Wednesday after Toll Brothers reported strong quarterly results and an industry group said home sales rose in July.
The nation's leading luxury homebuilder reported a 46% jump in net income to $61.6 million in the quarter ended July 31. Toll Brothers also said new contracts rose 57%, and its contract backlog grew 44% during the quarter.
Toll Brothers (TOL) stock gained nearly 4% Wednesday. Shares of Hovnanian (HOV), MOREBen Rooney - Aug 22, 2012 1:55 PM ET
Dell (DELL) is helping lead the market lower. Maybe housing finally has bottomed? And one trader is skeptical of Expedia's (EXPE) ability to buck the bearish trend today.
mojoris1977: just because David Einhorn and Whitney Tilson like $DELL doesn't mean you should just blindly follow them in. $XRX
TrendRida: $DELL takes the meaning of value trap to a new level...
firstadopter: $DELL call: seeing consumers switching IT spend to alternative mobile devices (Can MOREPaul R. La Monica - May 23, 2012 1:39 PM ET
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