The housing downturn also took a big chunk out of the profitability of the home improvement stores. Think about it, who wants to invest in a home that is losing value or that you may have to turn over to the bank. When you can not pay the mortgage, preventative maintenance is not a priority.
That is why today’s announcement that Lowe’s is seeing a turn around in the hard hit areas of the country shows that people are reinvesting in their home. A small sign maybe, and perhaps an optimistic reading of the tea leaves, but still a hopeful sign.
If people are investing in their homes, odds are they feel that these same homes have value and opportunity for the future.
Even as the hard-hit home improvement industry is beginning to stabilize at home, Lowe’s Cos. will open its first units in Mexico in the fourth quarter, executives said at the company’s third quarter conference call.
The company plans to open 13 new units in the quarter, including two in Monterrey, said Bob Hall, CFO. And despite an overall sales decline, some markets are starting to bounce back somewhat, noted Robert A. Niblock, chairman and CEO.
“Some of the biggest improvements have come in areas hardest hit by the housing downturn,” including California, Florida and the Southwest, he said.
Sales for the quarter declined 3% to $11.4 billion, down from $11.7 billion in the third quarter of 2008. Comparable store sales for the third quarter declined 7.5%. Net earnings were $344 million, down 29.5% from year-ago quarter.
No related posts.
{ 5 comments… read them below or add one }
I hope they took into consideration the preventative maintenance that most people do just to save themselves from a bad winter heating bill. Not winterizing your house can end up costing you several times over in energy.
-Tyler
I keep seeing mentions of Florida's market getting better in multiple blogs. I'm increasingly under the assumption that at least for that state, it can't get much, much worse. First higher success rates on short sales and now potential growth in home improvement… I hope that it's not just people winterizing as Tyler mentioned.
-Shane
The downturn is a great opportunity for homeowners to get creative and start pinching pennies. Home improvement stores should still see some sales for budget products and for items that help to save money.
although doing some small improvements around the house is getting more popular, major remodels has slowed down partly because the added value compared to the actual cost has dropped so much it makes it less appealing to have done.
If people want to sell their homes, they are going to have to make sure they look clean and up-to-date vs, all of the other homes for sale in this market. That's awful hard to do when your home is "upside down!"