Why Home Depot Is Doing Better Than Lowe’s In 2016
Home Depot (NYSE:HD) and Lowe’s (NYSE:LOW) are the number one and two home improvement retailers in the U.S., holding 24% and 17% market shares, respectively. Both the retailers began the year well, with Lowe’s beating Home Depot’s comps in Q1, the first time since Q2 2010. However, Lowe’s’ performance stalled in the second and third quarters, as consumer spending at retailers became weak in general.
While Home Depot managed to buck the trend of falling sales for retailers on increasing consumer spending on home improvement, Lowe’s missed growth estimates in Q3. Home Depot reaffirmed its guidance of 6.3% sales growth and 4.9% comp sales growth for 2016, and now expects full-year EPS to grow 15.9% to $6.33, up from the estimate of $6.31 after Q2, estimate of $6.27 after Q1, and estimate of $6.12-$6.18 after 2015 full-year results announcements. On the other hand, Lowe’s adjusted its previous estimate of 10% top line growth in 2016 to a 9-10% growth estimate, and adjusted its estimate of comp sales growth to 3-4% for 2016, down from an earlier estimate of 4% comp growth. Lowe’s’ sales growth estimate for 2016 is more than Home Depot’s 6.3% sales growth estimate, but this is as Lowe’s factored the inorganic growth of 4% due to the RONA acquisition, 0.5% growth due to opening of 45 stores, and 1.5% growth due to the inclusion of the 53rd week.
Have more questions on Home Depot? See the links below.
- How Home Depot Will Gain From The Low Inventory Of Homes For Sale
- Home Depot Has Been Operating Efficiently In The Last Few Years, And Here’s Why
- Home Depot Or Lowe’s — Which Retailer Is Doing Better In 2016?
- Home Depot Vs. Lowe’s – Who Is Better At Inventory Management?
- Home Depot Beats Consensus Estimates And The Trend Of Declining Sales For Retailers In Q1
- Where Will Home Depot’s Revenue And EBITDA Growth Come From Over The Next Three Years?
- How Has Home Depot’s Revenue And EBITDA Composition Changed Over 2012-2016E?
- What’s Home Depot’s Fundamental Value Based On Expected 2016 Results?
- What Is Home Depot’s Revenue And EBITDA Breakdown?
- By What Percentage Have Home Depot’s Revenues And EBITDA Grown Over The Last Five Years?
Notes:
- Down 8% This Year Will Home Depot Stock Rebound After Its Q3?
- Home Depot Stock To See Little Movement Past Q2
- Why Homebuilder Stocks Are Soaring This Year
- Can Home Depot Stock Return To Pre-Inflation Shock Highs?
- Why Are Housing Stocks Outperforming?
- Why Has Home Depot’s Stock Fallen 10% Since The Beginning Of The Year?