A boom in home repairs and improvement helps Lowe’s increase its profits by 17%, report from the company says. The retail home improvement and appliance store chain giant’s shares are trading near all-time highs as Wall Street bets. This year, Lowe’s stocks have soared almost 20%.
What the Numbers Say
Lowe’s released a report that shows how much their third quarter sales and earnings have increased. Their total sales were $13.7 billion, 5.6% higher than its sales last year, which amounts to $13 billion. Comparable store sales have increased by 5.1%. The company’s net income for the quarter was $585 million, 17% higher than last year’s $499 million. This means more Americans are spending on home improvements in the last few months.
CEO Robert A. Niblock expressed his delight by saying:
“We are pleased with our performance, and continue to be cautiously optimistic about the home improvement landscape.”
“Homeowners are looking to invest in their homes and are increasingly spending on big-ticket items,” he added.
According to federal data, building material sales rose 7.6% in September and 5.1% in October. Michael Lassner, retail analyst for UBS, said the home improvement sector “has been taking share from other retail categories.”He also noted that vendors who sell through Lowe’s have reported growing demand for appliances, along with new home construction and repair products.
A Strong, Healthy Competition
Home Depot, the company’s strongest competitor, also reported huge increase in earnings for the third quarter. A representative said Home Depot has managed to grow its profits by 20% despite a $28 million hit caused by an incident related to a hack attack. Comparable store sales have increased by 5.2%.
Experts mentioned several factors behind the two companies’ huge success in the third quarter. One is the increasing number of homes sold in the country. Buyers tend to spend more on improvements before they move in. While other retail companies are praying for strong sales during the holiday season, home improvement stores are preparing for spring, when homeowners perform most of their remodeling projects. Some of the fastest-moving products include power tools, which are good gift items for the holidays. Analysts also say the rising home prices and improving economic conditions are boosting construction material sales.
Despite the growing popularity of online shopping, Lowe’s and other home improvement retail store chains aren’t losing a huge share of the market. Most homeowners still prefer running into the store and picking up whatever they need for their projects.