Build Back Better

Image source:

What's going on?

Lowe’s posted better-than-expected quarterly results on Wednesday, as would-be builders looked for new ways to give their lives some much-needed structures.

What does this mean?

Between the surging workload of professional contractors and the relentless campaign among homeowners to craft a truly Instagram-worthy abode, Lowe’s sales rose 26% compared to the year before – outstripping the 20% growth analysts were predicting. Investors, though, are still skeptical that this isn’t all just the fading echoes of a locked-down population (tweet this). Throw in the fact that this quarter’s results will be compared to last year’s second quarter (the pandemic-fueled heyday of DIY projects), and it might make more sense why they initially sent its shares down 3%.

Why should I care?

For markets: Lowe’s biggest rival might have the edge.


Trouble was, Home Depot had already set expectations pretty high on Tuesday: the home improvement giant reported a 31% uptick in sales last quarter. And while Home Depot’s investors are just as aware that this DIY boom could subside any day now, they might argue that the retailer’s higher proportion of sales to professional DIYers gives it an advantage. Those handypeople, after all, are only going to become more welcome in people’s homes as the vaccines kick in, which could give Home Depot’s sales a disproportionate boost.



The bigger picture: Give us new homes already. 


Surging house prices have been encouraging people to spruce up their homes, sure, but the housing market is facing new problems that could compound investor skepticism toward the home improvement retailers. Fresh data on Tuesday showed the construction of new homes had dropped by the most since the pandemic hit. Put that down to a few bottlenecks facing the industry, like the shortage of available land, the decline in available labor, or the rise in lumber prices that – embarrassingly – makes it tricky for nervous homebuilders to get wood.

Originally posted as part of the Finimize daily email.

The top 2 financial news stories in 3 minutes. Join over one million Finimizers

Read next

Dead Heat

Sign up to Finimize

Get the two most important global financial news stories each day. Sent at midnight UK time.

Get started with one email a day

The top financial news stories in 3 minutes.