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While home improvement retailers have seen sales falter in recent months, Americans are still spending on smaller repair and maintenance work and taking up non-discretionary home projects, making up for some of the lost demand.
Larger rival Home Depot (NYSE:HD) last week also topped quarterly sales and profit expectations, with seasonal sales and steady demand from its Pro-customers offsetting a drop in big-ticket purchases.
The upbeat reports from home improvement retailers come at a time when the housing market has started to show some early signs of normalizing, with new home sales in the U.S. jumping 12.2% in May to the highest level in nearly 1-1/2 years.
A cold start to spring season also helped sales at Lowe’s (NYSE:LOW) as some demand for seasonal goods such as lawn and garden equipment and outdoor supplies was shifted into the second quarter from earlier in the year.
Shares of the company rose 3% to $224.10 after the company also reaffirmed its annual sales and profit forecasts.
The North Carolina-based retailer also saw its margins expand slightly to 33.7% in the second quarter ended Aug. 4, from 33.2% a year earlier, helped by falling prices of lumber and tighter cost management.
The company was confident in the mid- to long-term outlook for the home improvement industry, CEO Marvin Ellison said.
Lowe’s heavy investments in catering to its “Pro-customers”, which include professional builders, contractors and handymen, with services such as same-day delivery across the United States have also helped, Ellison added.
Same-store sales at Lowe’s fell 1.6% in the second quarter, compared with analysts’ average estimate of a 2.36% drop, according to Refinitiv data.
The company reported a profit of $4.56 per share, topping estimates of $4.49 per share.
