The scintillating housing market continues to lift Lowe’s (LOW). The home improvement retailer reported sales and earnings that topped Wall Street’s forecasts, just like rival Home Depot (HD) did a day earlier.
Lowe’s said Wednesday that it posted a net profit of $2.3 billion in the first quarter, a nearly 75% surge from the same period a year ago. Revenue was up almost 25% from the first quarter of 2020 — when the US economy went into a virtual standstill due to Covid-19.
CEO Marvin Ellison, a veteran Home Depot executive who joined Lowe’s in 2018 after a brief stint as the head of struggling JCPenney, hinted that Lowe’s gains may be coming at the expense of Home Depot. He said in the earnings release that the “outstanding performance” was due in part to “market share gains.”
But that, as well as a solid outlook, wasn’t enough to impress Wall Street. Lowe’s shares fell about 2% in early trading, as inflation fears are once again rattling the market.
Inflation is helping Lowe’s and Home Depot though. Rising lumber prices have been one of the factors propelling sales gains. And both stocks are still up about 20% year-to-date.