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Stan has been investing in stocks since high school. He began his portfolio with a deposit made up entirely of summer job savings & graduation gifts. His passion for investments and the stock market grew throughout his college career. He expanded his knowledge by co-founding an investment... More
  • Earnings Spotlight on Home Improvement Retailers: Home Depot & Lowes 1 comment
    Nov 12, 2009 06:04 PM | about stocks: HD, LOW
        Lowes (LOW) will report 3rd quarter 2010 earnings on 11/16 before the market open with their conference call taking place at 9 a.m. ET that morning.  Analysts expect EPS to come in at 24¢/share representing $350 million dollars in net income which is a 28% decrease from the 3rd quarter last year.

         Home Depot (HD) will report their 3rd quarter 2010 earnings on 11/17 and conduct their conference call at 9 a.m. ET before the market open.  Analysts expect EPS to come in at 35¢/share representing net income at $590 million dollars, a 22% decrease from the quarter a year prior.

         Home Depot has had a positive earnings surprise in each of the last six quarters, while Lowes has had three positive surprises, one negative surprise, and two in-line.

        Same store sales for these two retailers are also expected to decline with each of them guiding to the downside in the high single digits.

    Home Depot Common Size Analysis
         Q3$    Q3%    Q4$    Q4%    Q1$    Q1%    Q2$     Q2%
    Revenue $17,784 100.00% $14,607 100.00% $16,175 100.00% $19,071 100.00%
    SG&A $4,225 23.76% $4,251 29.10% $3,925 24.27% $4,101 21.50%
    Net Income $756 4.25% -$54 -0.37% $514 3.18% $1,116 5.85%


    Lowe's Common Size Analysis
        Q3$     Q3%    Q4$    Q4%    Q1$    Q1%    Q2$    Q2%
    Revenue $11,728 100.00% $9,984 100.00% $11,832 100.00% $13,844 100.00%
    SG&A $2,757 23.51% $2,641 26.45% $2,957 24.99% $3,123 22.56%
    Net Income $488 4.16% $162 1.62% $476 4.02% $759 5.48%

        With both of these retailers in a declining same store sales/revenue environment, and with SG&A costs expected to increase or at best stay stable due to new store openings, we can only assume that margins of these home improvement retailers will continue to be under even more pressure for the upcoming quarters.

    Disclosure: No positions


    Themes: Retail (Home Improvement) Stocks: HD, LOW
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This post has 1 comment:

  •  
    What's your analysis of why HD has reported positive earnings for the last six quarters compared to LOW?
    Nov 13 01:32 PM | Link | Reply
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