Last week, big box retailers Home Depot and Lowe’s both announced their fourth-quarter revenues with sales growth that suggests consumers are increasingly spending money on home improvement purchases.
Read the following articles for more details on the companies’ financial performance:
Home Depot’s Sales Up for Q4 and All of 2015
Lowe’s Fourth-Quarter Sales Higher than Expected
One disadvantage Lowe’s has competitively is that it continues to trail Home Depot in number of locations, according to Bloomberg Business.
“Our footprint, where are stores are, doesn’t exactly match up with where Home Depot’s footprint is,” Lowe’s CEO Robert Niblick says in the Bloomberg Business article. “They have more stores in the Northeast than we do. If you think about the mild winter and the delta between a normal winter and what we saw this year, probably some of the biggest difference between those was in the Northeast.”
However, both retailers are doing well financially compared to retailers in many other sectors because consumers are willing to invest more money on their homes while stepping back from spending in other areas, according to Fortune.
“Consumers are incentivized to spend more on sprucing up their homes because the recovering housing market, as well as constrained supply, has led to home price appreciation,” the Fortune article says. “When the value of homes increases, consumers are more willing to open their wallets to replace roofs, invest in fencing and siding and renovate.”