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.
Lowe's (LOW) impressed investors with third quarter results Monday that showed the home improvement retailer is following its own slogan to "never stop improving."
Third quarter profits jumped 76% from a year ago. Investors, in turn, pushed the stock up nearly 7% Monday. That had some traders on StockTwits excited.
elliottrexler: $LOW. Is an increase in same store sales oversees an indication of what's to come? #Lowes Beats estimates
Still it's unclear MOREMaureen Farrell - Nov 19, 2012 12:35 PM ET
Is the housing market really recovering? If you look at the latest results from Lowe's (LOW), you'd be tempted to answer no. But Lowe's top rival, Home Depot (HD) reported a pretty strong quarter and issued good guidance last week. Shares of Lowe's fell more than 4% in early trading Monday.
It seems that housing is slowly but surely rebounding. The problem with Lowe's seems to be that Home Depot is MOREPaul R. La Monica - Aug 20, 2012 10:11 AM ET
Maureen Farrell - Aug 14, 2012 10:37 AM ET
Not a member yet?Sign up now for a free account