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Lowe’s, Home Depot put up big numbers as housing booms

NEW YORK (AP) — Lowe’s reported surging first-quarter profits and comparable-store sales boomed in the midst of a strong recovery in the U.S. housing market.

The Mooresville, N.C., company boosted its outlook for the year, as did its rival, Home Depot on Tuesday, as home improvement stores continue to distance themselves from a retail sector that can’t seem to get shoppers through the door, or to spend much money when they do.

Lowe’s profit jumped 31.4 percent to $884 million, or 98 cents per share. Earnings, adjusted for non-recurring gains, were 87 cents per share, which topped Wall Street expectations by 2 cents, according to a poll by Zacks Investment Research.

Revenue rose 7.8 percent to $15.23 billion, also beating analyst expectations easily.

Lowe’s and Home Depot are riding a robust housing construction rebound.

The Commerce Department on Tuesday reported that the construction of new homes climbed 6.6 percent to a seasonally adjusted annual rate of 1.17 million units.

Ground-breakings are running ahead of last year’s pace, largely because of a dramatic increase in the construction of single-family houses, especially in the Midwest and South. Relatively few existing homes are listed for sale, creating an incentive for developers to expand supplies through building during a period of low mortgage rates.

And owners of those existing homes are plowing money into them, which is translating into big ticket sales for retailers like Lowe’s.

Same-store sales, a key measure of a retailer’s health, rose 7.4 percent in Lowe’s most recent quarter.

Builders and home improvement retailers appear confident that the boom will go on.

The National Association of Home Builders/Wells Fargo builder sentiment index released this week held steady for the fourth consecutive month.

Lowe’s is about to close on its $2.3 billion buyout of Canadian home improvement retailer Rona, which runs nearly 500 stores. Canadian regulators signed off on that deal last week.

As of April, Lowe’s operated 1,860 home improvement and hardware stores in the U.S., Canada and Mexico.

Elements of this story were generated by Automated Insights using data from Zacks Investment Research.

Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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