Lowe's narrows sales gap with Home Depot
By Dhanya Skariachan
(Reuters) - Lowe's Cos Inc (LOW.N: Quote) reported stronger-than-expected quarterly results as the housing market's recovery encouraged Americans to spend more on their homes, and the No. 2 home improvement chain narrowed its sales gap against rival Home Depot Inc (HD.N: Quote).
The results prompted Lowe's to raise its fiscal-year outlook, and its shares hit an all-time high on a split adjusted basis on Wednesday.
The news came the day after Home Depot also reported rosy results, giving further proof of the strength in the U.S. housing market recovery.
Lowe's sales at stores open at least a year rose 9.6 percent in the second quarter ended on August 2 but trailed the 10.7 percent increase at Home Depot.
However, that is the narrowest gap in same-store sales between the two retailers since the third quarter of 2010, BMO Capital Markets analyst Wayne Hood said.
"This could signal that (Lowe's) product line reviews and merchandise assortment overhaul are starting to work," Hood said.
Home improvement chains, whose sales crumbled during the housing downturn, are enjoying a comeback as rising prices for homes have led to renewed interest in renovating them.
"We think both companies are on a pretty good surfboard in front of a pretty good tsunami," said Bill Smead, a portfolio manager at the Smead Value Fund in Seattle. Continued...