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.
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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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