Home-improvement retailer Lowe’s sales are looking a lot sturdier.
On Wednesday, Lowe’s (LOW) reported a very strong holiday sales at a time when many brick-and-mortar retailers are struggling to lure shoppers. The company reported fourth-quarter same-store sales jumped a better-than-expected 5.1% while overall sales jumped 19% to $15.8 billion. The strong results were important for Lowe’s had disappointed investors in the fall when it reported third-quarter results that implied it was lagging top rival Home Depot (HD).
Investors praised the news. They sent shares of Lowe’s up about 10%, while Home Depot’s stock increased by about 1%.
The latest results from Lowe’s, which comes after Home Depot also reported strong holiday sales, implies that both continue to benefit from a strong housing market. Housing prices have been steadily increasing despite the effects of rising interest rates, and home improvement executives say that improving metric is critical to inspire spending on remodeling, additions and other improvement needs as homeowners will view their home as an appreciating asset.
Lowe’s Chairman and CEO Robert Niblock touted the company’s strong holiday performance and said it benefited from broad-based project demand. Home Depot has also said that growth on spending for the home has been broad at that company’s stores. Both are also benefiting from increased sales for the e-commerce channel, while also not facing too much of a threat from e-commerce giants like Amazon.com (AMZN) as many of the goods sold at Home Depot and Lowe’s are too bulky for easy shipping.
Looking ahead, Lowe’s projected total sales for the new year would increase by about 5%, while same-store sales will jump by 3.5%. It also expects to open 35 home improvement and hardware stores. Home Depot, meanwhile, targeted 4.6% sales growth on a similar increase in same-store sales. Home Depot expects to open just 6 new stores for the year.