Home improvement retailer Lowe's Companies, Inc. LOW reported fourth-quarter results Wednesday morning that were highlighted by an earnings beat, but sales came in slightly lower than forecasted.
Nagel: Lowe's Catching Up To Home Depot
Lowe's reported its comps rose 1.7 percent in the fourth quarter, which fell short of the 2.1 percent expected. But comps in U.S. stores were up 2.4 percent, which is lower than the 3.7-percent comp growth Home Depot Inc HD showed in its fourth-quarter results Tuesday.
The 1.3-percentage point spread between the rival retailers is "the narrowest it has been in a while," Oppenheimer's Brian Nagel told CNBC in an interview.
Home Depot is still the better performer among the two, but the Lowe's report shows it has "caught up a bit," the analyst said. It is possible that Lowe's internal initiatives — spearheaded by new CEO Marvin Ellison, who also happens to be an ex-Home Depot executive — are contributing to recent momentum, he said.
Why It's Important
The Home Depot and Lowe's earnings reports come at a time when investors appear to be "too concerned" about traditional housing metrics, which are coming in weak, Nagel told CNBC.
The bigger driver of the home improvement retail sector hinges on other metrics like consumer spending, employment and wage growth, in his view.
Lowe's said recorded a comp gain of 5.8 percent in January, which represents a "nice acceleration" into the second quarter, Nagel said, adding that investors should view the earnings report positively.
Photo via Wikimedia.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.
All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.
Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.
Rate collection and criteria: Click here for more information on rate collection and criteria.