Home Depot results may signal some improvement

Lowe's said Monday its profit plunged 30% but that it has seen improvement in some of its worst hit markets including California, Florida and areas of the Southwest. See full story on Lowe's results.

That bodes well for Atlanta-based Home Depot, analysts said, because those regions represent a bigger percentage of the company's business. Credit Suisse analyst Gary Balter estimated that the regions represent 17% for Lowe's and 25% for Home Depot.
Cash on the sidelines is key

While retail investors are holding plenty of greenbacks, what bond funds, big companies and ultra-wealthy investors do with their ample cash stores could hold the key to 2010, says Barron's Mike Santoli.

Home Depot's shares were up 0.6% while Lowe's shares were down about 1%.

Lowe's other comments about consumer spending and consumers' perception that the value of homes has showed some stabilization also may indicate similar positive sentiment from Home Depot, analysts said.

While consumers continued to curtail buying of orders above $500, executives at the Mooresville, N.C.-based Lowe's said buyers are gradually feeling more comfortable about larger ticket purchases with flooring, kitchen and bathroom remodels ranking at the top of the list of their delayed home-improvement projects.

"There's a lot of work that people have been postponing," said Bill Smead of Smead Capital Management, a Home Depot shareholder. "Home Depot will be a beneficiary."

Home Depot said in August that it had seen some positive signs, including the retailer's first positive comparable transactions in the United States for the first time in more than five years, as well as its biggest gain in total market share in five years.

To be sure, while Home Depot is expected to echo some positive sentiment, its overall results aren't expected to look too pretty just yet.

Analysts estimated the Atlanta-based company is expected to report profit likely declined to 36 cents a share from 45 cents a share, according to FactSet Research.

Other data also suggested the sector continued to be among the worst hit. The Commerce Department reported better-than-expected October retail sales on Monday, with home-goods related segments including furniture and home-improvement still posting declines even as general-merchandise and apparel stores saw gains.



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National Home Improvement Council Concerned Over Green Improvements

Right now a proposal has been put forward by the government that would allow homeowners to build things like wind turbines on their properties without needing planning permission. Of course, this proposal has been brought up for homes to help cut down on carbon emission and allow people to pay less for electricity. Despite the good intentions of the proposal, the National Home Improvement Council has their concerns.

The National Home improvement Council is afraid that homeowners could end up going a little overboard with these so-called green improvements. Thus, a three month consultation will be taking place to establish peoples’ view on the subject before any kind of decision is made.

The director of the National Home Improvement Council, Andrew Leech, said that they need to make it easier for people to make environmental changes. However, a little bit of control also needs to be kept to make sure people do not go overboard. Andrew also noted that many homeowners may lack the knowledge of where the best lace to put a wind turbine would be to get the maximum effects from it.

If the new rules are approved, then it would apply to, not only homeowners, but to businesses and developers as well. Businesses are becoming increasingly concerned about the cost of energy and how much they use. Figures that have just been released by the Department of Environment, Food and Rural Affairs showed that £6.4 billion a year could be saved if businesses would employ simple energy efficiency measures. This would, not only help the company save money, but also help the UK reach its carbon emission goals.


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Home improvement scheme finished

SFA Financial Aid will be switching lenders for student loan programs. This scheduled change will affect more than 7,000 students utilizing the Federal Stafford Loans (subsidized and unsubsidized) as well as the Federal Parent Plus Loan.

Currently, loan funding comes from 100+ financial institutions that participate in the federal loan program; with this change, funding will now be allocated through one direct lending source, the U.S. Treasury. All students who plan on receiving financial aid beginning with the Fall 2010 Semester must complete a new master promissory note regardless of previously completed promissory notes. This includes any loans granted to SFA parents as well.

This change will not affect interest rates, as they are set in the same manner and will be appointed accordingly.

"Our biggest concern is educating students about this impending change so that they know what to do and when to do it," Rachele Nixon, assistant director of financial aid, said. The financial aid department plans on rolling out a campaign to educate students on the changes beginning in December with a heavy emphasis in the Spring 2010 Semester after the transition has been completed and the process nailed down.

An important issue for upper level students receiving financial aid to consider is that this change will have a greater affect on their loans.

"Our long-term goals for students is that they understand when they graduate they will then carry two loans, (one) from the previous system and (one from) the new system. At (that) point they may wish to consider a consolidation loan upon graduation to alleviate the burden of carrying multiple loans," Valerie Harrell, assistant director of financial aid, said.

Student loans for the 2008 SFA school year amounted to $68 million, further indicating the scope of this change for students. This transition to direct lending through the U.S. Treasury is being instated in multiple higher education institutions, and the numbers are expected to grow. Over the past two years the financial aid program has begun losing participating lenders due to fundamental issues concerning new regulations that are tightening up the lending process.

While SFA is not legally bound to make this switch, current legislation indicates that it may very well become a mandate in the future.


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Home Depot sales, profit slide in third quarter

As consumers slowly dust off their wallets to purchase clothing and electronics, home improvement sales continue to lag.Earnings reports this week show same-store sales continuing to sputter at Home Depot and Lowe's, while stores with off-price goods like TJMaxx saw improvement.

Home Depot's third quarter sales fell 8 percent, reflecting a continued malaise in the housing market triggered by a drop in home values and neighborhoods plagued by foreclosures. Roughly 38 percent of homeowners are estimated to have negative, or near negative, equity in their homes.

The home improvement sector has seen $55 billion in annual sales evaporate since 2006, noted Carol Tomé, Home Depot's chief financial officer, in an interview with The Atlanta Journal-Constitution after the chain's quarterly report on Tuesday. Home Depot still has a 20.5 percent share of what is now a $289 billion market for the last 12 months, down from $344 billion in 2006, Tome' said.

"Generally people are concerned about jobs and credit," she said. "As they look forward to 2010, they don’t see a lot of relief coming their way."

The Atlanta-based retail giant posted third quarter profit of $689 million, or 41 cents a share, down 8.9 percent from a year earlier. Sales were $16.4 billion.

Like many companies, Home Depot has held up profits by cutting costs and closing stores. The company raised its full-year earnings guidance, but not its revenue outlook.

In a conference call with analysts, Chief Executive Frank Blake said a recovery for the home improvement sector is not yet at hand. "We are still in ‘less bad' territory" compared to previous reports, he said.

In one telling sign, Home Depot said purchases of less than $50 rose 2 percent in the quarter, while big ticket purchases – $900 or above – fell by 10 percent. Lowe's reported a similar gap. The average checkout tab at Home Depot slipped to $51.89, down 7 percent from a year earlier.

On Monday, Lowe's announced earnings of $344 million, a 29.5 percent decline, on revenues of $11.4 billion, down 3 percent.

Analysts note that while decreased home improvement sales led retailers into the recession, it appears they will trail the sector coming out.

"Given that declines in home improvement demand led the overall retail space by over two years, one might have expected home improvement sales to lead in the recovery," Colin McGranahan with Bernstein Research wrote in a Nov. 2 report. "However, the opposite has occurred – home improvement declines are persisting even as core retail sales are beginning to recover."

Tomé said stagnant or falling housing prices prompt homeowners to think: " ‘Why should I if I'm not going to get a return?' If you think of [home improvement] as an investment, you'll think differently than if it’s a cost."


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Pennsylvania's Home Improvement Consumer Protection Act Takes Effect July 1

The Home Improvement Consumer Protection Act, which was adopted by Pennsylvania's General Assembly last October, will take effect July 1, 2009. The law requires that all contractors who perform $5,000 or more in home improvements annually register with the Attorney General's Office. Included are those who perform home improvements, installations or replacements of a variety of services including doors and windows, solar energy systems, as well as many others. Registration requires that contractors maintain minimum insurance coverage and use contracts containing important information about home projects, including the start date and completion date, a description of work being performed and consumers' rights under the law. The registration is valid for two years and costs $50.
According to Pennsylvania attorney general Tom Corbett, the law is intended to protect consumers from unscrupulous contractors, provide new protection for consumers who hire home improvement contractors and authorize criminal penalties for home improvement fraud.
Door and window companies in Pennsylvania say this new regulation is good news for the state's home improvement market.
"We are thrilled that the Attorney General's Office is requiring contractors/dealers to register with the state if they want to do business here after July 1," said Alan Levin, president and chief executive office, of Northeast Building Products located in Philadelphia. "We are encouraged to know that people wishing to do home improvement work and or repair in our state, are now required to provide information, such as proper insurance, and their drivers licenses. This will help to reduce the chances of fraud that has become Pennsylvania's number one complaint with the Attorney General's Office, surpassing automobile fraud. This we are not proud of. Anything that gets done to help maintain the credibility of our industry is a positive one."
Tyson Schwartz, vice president of sales and marketing for Gorell Windows and Doors in Indiana, Pa., has a similar view.
"This new act, which is meant to protect homeowners from unscrupulous contractors does put the professional and honest remodeling dealers/contractors on a much better playing field. Remodelers will have to have a more open book policy with homeowners in regard to insurance, any past legal issues, any past licensing issues, etc.," says Schwartz. "The Pennsylvania remodeling dealers will quickly adjust to the act, and homeowners will have the benefit of knowing the remodeling industry will be a much more professional and open book industry."

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Take advantage of energy-saving tax credits for your home

Natick, Mass. - Home improvement season is here and Better Business Bureau is offering advice on how to take advantage of tax credits being offered by the Federal government while increasing home energy efficiency and helping the environment at the same time.

The American Recovery and Reinvestment Act of 2009 included several new tax and expanded credits that homeowners can take advantage of while increasing the energy efficiency of their home, and according to Remodeling Magazine's 2008-2009 Cost vs. Value report, energy efficient replacement projects are some of the best bets for recouping money at resale. Some qualifying improvements include routine work that every homeowner must undertake now and then, such as installing a new roof. However, other qualifying improvements are more involved including installing a wind or solar energy system.

“Increasing the energy efficiency of your home is one way to cut down on monthly bills, and now is a great time to make some modest home improvements to take advantage of federal tax credits and boost resale value,” said Paula Fleming, BBB spokesperson. “Before making any energy saving purchases, do your homework because not all products qualify for a tax credit and not every product with an ENERGY STAR seal will apply.”

To qualify for tax credits, improvements must typically be made on the owner’s primary residence. Homeowners should keep in mind that just because a product has an ENERGY STAR seal—the Environmental Protection Agency’s standard for energy efficient consumer products—it doesn’t mean the purchase qualifies for the tax credit. For the following home improvements, a household can take a tax credit for 30 percent of the improvement cost up to $1,500 total for all improvements made.

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Home improvement Q&A: Getting patio furniture spruced up for summer

Q: We bought patio chairs several years ago. We leave them out of doors year-round, and the material has become discolored. Is there a way to clean them? No holes or any other problems.
A: Let's talk about cleaning more than just your chairs, if we may, since summer has arrived, and it's time to play outdoors.
To clean woven furniture, you'll need to get into and around those intricate weaves. And that requires a variety of brushes - a new, rather than used, toothbrush (stiffer bristles); a small paintbrush with bristles cut down by half, to make them stiffer but not sharper; and a bristle brush with medium bristles.
Some experts recommend sharpening a dowel to pick out bits of dirt and debris, but the best tools are already sharpened - try the wooden skewers used to make shish kebab.
After you have gotten the gunk and grime out of the weaves, vacuum a wicker piece thoroughly. Then, wash it using minimal amounts of a solution that is two tablespoons of ammonia to two gallons of water. Clean in sections from top to bottom, then dry the wicker quickly to prevent it from warping. Lay the piece on a clean canvas drop cloth; tip it so the tighter weaves are on top and the looser on the bottom, so the moisture runs down and away quickly. Keep the weaves straight, so they don't shrink.
If mere cleaning isn't enough, sand and repaint (following the manufacturer's suggestions). Depending on the piece, spray paint may give better coverage in less time.
For regular aluminum chairs, grab a plastic scrub brush and dishwashing detergent at full strength and then scrub, scrub, scrub. Rinse thoroughly, then let dry.
For coated-aluminum pieces, experts also recommend full-strength dishwashing detergent, but using a sponge instead. Rinse completely, dry with a soft cloth, and then rub on car wax to polish, avoiding the fabric. If you get wax on the fabric, clean it quickly. Buff the metal after it dries.
Take a look at your old plastic furniture. Is it worth keeping another year?
If the chairs cost $2 each 10 years ago, you can find sturdier and nicer ones for about the same price today. But if you opt to keep them, wash the pieces with three tablespoons of powdered laundry detergent (or oxygenated bleach such as OxiClean) mixed in a gallon of warm water. A scrub brush will work, but avoid stiff bristle brushes, which can scratch or gouge the plastic surface. Let the solution soak in for a few minutes. Rinse thoroughly, then dry.
Check the label for the manufacturer's suggestions. If cushions or seat webbing are washable, use warm, soapy water or a foam cleaner. Apply with a sponge, rinse and dry quickly.
Wrought-iron furniture tends to rust, which is why it should always be covered if left outside in winter. If corrosion has already begun, use a wire brush on the metal lightly, to remove the rust but not the paint. Naval jelly, available at home centers and hardware stores, also can dissolve rust; some products become a primer that lets you apply protective paint in 24 hours. Rust stains can be removed with fine steel wool dipped in kerosene. Wear protective gloves and safety glasses and apply in the open, away from fire. To get into the joints, disassemble the furniture.
Got a mildewed patio umbrella? Open it and lay it on its side, then clean with oxygenated bleach in warm water - though you should check the manufacturer's care suggestions (chlorine bleach will fade acrylics). Use a soft-bristle brush on one section at a time; rinse with clean water and let dry.

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