Dive Brief:
- Analysts say a rebounding housing market helped home improvement retailer Home Depot exceed Wall Street expectations for Q1 profit and revenue. Lowe's, analysts say, fell short due to its lagging execution.
- Home Depot's net earnings were: $1.6 billion, or $1.21 per diluted share, compared with net earnings of $1.4 billion, or $1.00 per diluted share, in the same period of fiscal 2014.
- Lowe's net earnings were: $673 million, or .70 per diluted share, compared with net earnings of $624 million, or .61 per diluted share, in the same period of fiscal 2014.
Dive Insight:
A break in the harsh weather, especially coming off the bleak winter, has been a factor in the performance of both companies. The higher-than-expected report from Home Depot is also attributed to the company having a focus in Nevada, Florida and California — states where the housing market is thriving, according to CNBC.
Home Depot's $7 million data breach-related cost in its first-quarter earnings could present an adverse impact on fiscal 2015 results and perhaps future periods, analysts report.
Barron's called Home Depot, which beat Q4 earnings and is the leader in home improvement, a buying opportunity. After the earnings report on Tuesday, Home Depot stock closed at 114.33 and opened Wednesday at 116.12.
Lowe's, which announced Wednesday morning, opened at 73.68 after closing at 73.06. TheStreet rates Lowe's a buy. Lowe's also closed the comp sales gap to 100 basis points.
The earnings miss by Lowe's has The Motley Fool speculating about a housing slowdown, as it raised concerns about the strength of the home improvement market.