Build Back Better

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What's going on?

Lowes 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, Lowes sales rose 26% compared to the year before outstripping the 20% growth analysts were predicting. Investors, though, are still skeptical that this isnt all just the fading echoes of a locked-down population (tweet this). Throw in the fact that this quarters results will be compared to last years 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: Lowes 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 Depots investors are just as aware that this DIY boom could subside any day now, they might argue that the retailers higher proportion of sales to professional DIYers gives it an advantage. Those handypeople, after all, are only going to become more welcome in peoples homes as the vaccines kick in, which could give Home Depots 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.

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