Home Depot’s quarterly earnings beat expectations Tuesday; Lowe’s reported Wednesday morning it saw same-store sales growth of more than 30% last quarter, and just beat earnings estimates. These stores have seen gains over the summer during the pandemic as lots of folks are occupying time at home with improvement projects. But winter is coming, so what will that mean?
Home Depot told investors that this summer, people spent a lot on big-ticket items — like riding lawn mowers and outdoor power equipment. But as Sonia Lapinsky, managing director at AlixPartners, points out, companies can’t count on those one-time purchases in the future.
“How are they going to keep engaging and expanding their consumer base? Because a lot of these things are one-time deals, and there’s only so much we can improve and fix up,” she said.
Lapinsky said as long as we’re stuck at home, home improvement retailers should be in good shape. But Neil Saunders, retail analyst at GlobalData, said in the fourth quarter, the growth rates may come down a bit.
“Because obviously, we’re not going to spend as much on the garden, which has been a big area of home improvement spending over the summer months,” he said. “And as it gets into winter, people just don’t spend as much time outdoors.”
But Saunders said some restaurants and bars will be making improvements to keep customers eating outdoors through the winter. And those business owners also go to places like Home Depot and Lowe’s looking for lumber, lights and heating lamps to retrofit their operations.
COVID-19 Economy FAQs
Are states ready to roll out COVID-19 vaccines?
Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.
How is the service industry dealing with the return of coronavirus restrictions?
Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.
How are hospitals handling the nationwide surge in COVID-19 cases?
As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.
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