Lowe’s seen gaining on Home Depot in lockdown DIY boom By Reuters

© Reuters.

By Uday Sampath Kumar

(Reuters) – Lowe’s Co Inc (N:) is expected to edge past rival Home Depot (N:) with what could be its biggest growth in quarterly same-store sales in at least a decade, benefiting from its exposure to customers ready to splurge on do-it-yourself home renovations.

Sellers of paint, tools and gardening equipment have been among the winners since the start of the COVID-19 pandemic, as people take up more repair and remodeling projects themselves while hunkered down at home.

But business for handymen, carpenters or professional contractors, who tend to shop more at Home Depot, has slowed.

Lowe’s is expected to post same-store sales growth of 11.7% when its reports its May-July quarter results, while Home Depot, scheduled to report on Tuesday, is expected to post a 10.2% rise.

“Lowe’s should outperform Home Depot handily,” Wedbush Securities analyst Seth Basham said, estimating that about 75% of Lowe’s total sales come from DIY customers, compared with about 55% for Home Depot.

Still, both have continued to invest in pulling in high-spending building contractors, as U.S. homebuilding jumps amid rising demand for housing in suburban and rural areas. [nL2N2EO0L2]

The rush to the suburbs, as more companies allow work-from-home, has been a boost for Lowe’s, which has a majority of its stores located in those areas.

Graphic: Interactive graphic on foot traffic https://graphics.reuters.com/HOMEIMPROVEMENT-RESULTS/azgpokqbxpd/index.html

Graphic: Interactive graphic on same-stores sales https://graphics.reuters.com/HOMEIMPROVEMENT-RESULTS/jznpnkybmvl/index.html

Analysts say Lowe’s has also better targeted young home owners through a millennial-focused marketing campaign, which features interior designer Bobby Berk from the hit Netflix (NASDAQ:) show “Queer Eye”.

To be sure, Lowe’s is a long way from overtaking its rival in total revenue or profit.

“We’re expecting Lowe’s to beat estimates, but the one challenge they have against Home Depot is their margins. Their sales are coming through, but they need better margins to compete,” said Jim Boothe, chief investment officer of Brentview Investment Management, which holds a stake in Lowe’s.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Be the first to comment

Leave a Reply

Your email address will not be published.


*