Investors will watch this week’s earnings reports from Home Depot and Lowe’s for signs of any reduction in the headwinds that have been facing the home and garden market.
The sector has faced a sluggish housing market, tariffs, high interest rates and consumer caution when it comes to big purchases, Reuters reported Monday (Aug. 18).
While most categories of retailers posted growth from May to July, building materials and garden supply retailers saw year-over-year drops of at least 4%, the report said, citing data from the National Retail Federation.
At the same time, Home Depot and Lowe’s have continued to take market share from smaller competitors, aided by their brand power and competitive pricing, according to the report.
Home Depot is set to hold its earnings call Tuesday (Aug. 19), while Lowe’s will hold its earnings call Wednesday (Aug. 20).
Home Depot said during its previous earnings call, which was held on May 20, that in its first quarter, it earned total sales of $39.9 billion, up 9.4% year over year, though its comparable sales were down 0.2% due to foreign exchange rates.
Richard McPhail, chief financial officer at Home Depot, told CNBC at the time that customers shouldn’t expect tariff-driven price increase. McPhail said the company aimed to leverage its scale, partnerships with suppliers, productivity and diversified sources to “generally maintain our current pricing levels across our portfolio.”
Lowe’s said during a May 21 earnings call that its total sales for the first quarter slipped from $21.4 billion a year earlier to $20.9 billion, while its comparable sales decreased 1.7%. The company attributed the drop to unfavorable weather, adding that this was partially offset by comparable growth in online sales and its pro business.
“Despite near-term uncertainty and housing market headwinds, our team’s unwavering focus on exceptional customer service has elevated satisfaction scores and earned Lowe’s the #1 ranking in Customer Satisfaction among Home Improvement Retailers by J.D. Power,” Lowe’s Chairman, President and CEO Marvin R. Ellison said at the time in a press release. “Strategic investments in technology, inviting store environments and our dedicated associates continue to solidify our commitment to serving our customers and communities.”
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