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Lowe's topped Home Depot thanks to advertising and geography

Now that both major home-improvement retailers have posted their results for the pandemic quarter, investors are left to ponder: How did Lowe’s Cos. outperform Home Depot Inc. by so much?

It likely came down to advertising, promotions and store locations that are farther away from the areas hardest hit by Covid-19.

Lowe’s went ahead with big promotional events during the first quarter, including their Spring Black Friday. Home Depot, meanwhile, didn’t partake in that kind of advertising as part of its push to curb visits to stores during the pandemic. Lowe’s also took steps to reduce crowds, like closing stores early at 7 p.m., although Home Depot closes earlier, at 6 p.m.

“Lowe’s did run the Spring Black Friday event, and may have benefited from traffic related to that, among other factors,” Seth Sigman, an analyst for Credit Suisse said Wednesday in a research note.

Lowe’s also sponsored the NFL virtual draft and recently collaborated with “American Idol.”

In the first quarter, Lowe’s boosted same-store sales 11 percent, its biggest increase since 2003, in crushing the average analyst estimate of 4 percent. Home Depot posted a gain of 6.4 percent, which also topped estimates.

Lowe’s shares rose as much as 5 percent in New York trading on Wednesday. Home Depot gained as much as 1.8 percent, after a decline Tuesday of 3 percent following its earnings release.