Lowes Showing Better Than Expected Results : The Real Estate Bloggers

Lowes Showing Better Than Expected Results

August 21st, 2007 • Related • Filed Under

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Many who are watching the housing slump are keeping an eye on Lowes and Home Depot. The two home repair giants are great indicators on how consumers are spending on home repairs and upgrades. Lowes surprised analysts showing improved earnings for the second quarter up to 67 cents a share from 60 cents the previous year.

The improvements came from the parts of the country that did not have the huge run up in housing appreciation. California, Florida, and the Northeast were the worst markets for Lowes, while most of the rest of the country showed gains in sales.

Lowe’s said sales were weakest in the cool real estate markets in California and Florida. Sales in the Northeast, though bad, were “showing encouraging signs of improvement,” Lowe’s chairman and chief executive Robert A. Niblock said in a statement. Stores in much of the rest of the country, however, posted sales increases.
The biggest surprise for many analysts was wider profit margins. Reasons for the better profits, according Lemos: Investments in distribution systems are paying off; less was spent on promotional sales; sales shifted to a more profitable product mix; and also theft — what retailers call “shrinkage” — was down.
More good news: Lowe’s expects same-store sales to stop sliding and come in flat in the third quarter.  via Business Week

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