Lowe’s Takes Market Share from Home Depot

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Aug 20, 2002
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Shifting to large, edge-of-town warehouse stores later than Home Depot appears to have helped Lowe’s report faster sales growth than the home improvement frontrunner, reports FT.com. Although Home Depot experienced a bump in its share price today as a result of a favorable second quarter earnings report, it has seen a slide of 40 percent since May on fears that future growth will slow.

Continued strength of the U.S. housing market cushioned Lowe’s against broader weakening of consumer confidence as the stock market fell, helping it to surpass expectations with a 42 percent increase in quarterly profits, according to the company.

Lowe’s total sales increased 22.2 percent to $7.49 billion – slightly ahead of its own 21-22 percent guidance. Comparable sales, from stores open at least a year, increased slightly ahead of guidance at 6.8 percent compared with 1.7 percent comparable growth in the same quarter last year. Home Depot today posted second-quarter earnings of $1.18 billion, or 50 cents a share, compared with $924 million, or 39 cents a share, a year earlier. The latest quarter was three cents a share higher than analysts’ expectations. The company also said it’s comfortable with estimates for the remainder of its fiscal year.

Moderator Comment: Is Lowe’s better positioned than
Home Depot for long-term growth?

Women are making up an increasingly larger percentage
of DIY consumers while continuing to have a strong voice in many home repair
and renovation projects. Lowe’s has gone directly to the source and its working.

Home Depot says the right things but the reality, according
to female consumers we have spoken with, is quite different from the rhetoric.
[George
Anderson – Moderator
]

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