While Home Depot still reigns as the largest home center in the world, Lowe's has become the Wall Street darling with its continuing sales and earnings growth.
Lowe's, Wilkerson, N.C., buoyed by a strong housing market and its expansion into new markets, increased its third-quarter profit by 35 percent. Third-quarter net income rose from $250 million to $339 million. Total sales increased 18 percent to $6.4 billion, with same-store sales up 4.1 percent.
“Demographic and societal trends continue to provide longer-term opportunity for our company as Americans increase their focus on the comforts of the home,” said Robert Tillman, Lowe's chairman.
Lowe's, second-ranked behind industry-leader Home Depot Inc., Atlanta, also said profit for the fourth quarter and fiscal year would likely beat analysts' estimates as consumers invest in their homes. Home-improvement retailing has strengthened this year as low interest rates spurred home refinancings that have introduced billions of dollars into the economy.
The retailer is also benefiting from its expansion into richer U.S. markets such as Boston. It opened 18 stores during the third quarter, bringing its total to 823. For 2002, Lowe's expects to open 123 stores, including 37 in the fourth quarter.
Home Depot reported net income rose 20.8 percent in the third quarter as it focused on sales of big-ticket items like appliances and flooring during the quarter.
The Atlanta-based company said it earned $940 million, compared with $778 million, in the same period last year. Sales for the quarter increased 9 percent to $14.5 billion; up from $13.3 billion a year ago, as the company added 34 stores.
But sales at stores open at least a year, known as same-store sales, were down 2 percent for the July-September period. Same-store sales are the best gauge of a retailer's strength. Home Depot's report said it is still in the process of expansive efforts to improve customer service and update its stores.
Through the first nine months of the year, Home Depot's net income was $2.9 billion, up from $2.3 billion a year ago. Revenue rose to $45 billion from $40.1 billion in the first nine months of 2001.