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.
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