Reporting a 2.7 percent rise in net earnings today for the first quarter, the nation’s second largest home improvement retailer remains cautious about the balance of 2010.
“While we are optimistic we will experience solid demand through the balance of the year, we view 2010 as a year of transition for our industry. We remain confident that our commitment to providing excellent customer service, combined with great merchandising, will drive profitable sales and market share growth,” commented Robert A. Niblock, Lowe’s chairman and CEO.
Crediting the Federal tax credit and favorable March and April weather with stimulating home sales and driving sales that exceeded expectations, Niblock said consumers are showing signs of reengagement in home improvement.
During the quarter, Lowe’s opened 11 stores. As of April 30, 2010, Lowe’s operated 1,721 stores in the United States, Canada and Mexico representing 194.3 million square feet of retail selling space, a 2.9 percent increase over last year.
In the second quarter, the company expects to open approximately 4 new stores reflecting square footage growth of approximately 2 percent. Total sales are expected to increase 5 to 7 percent and comparable store sales are expected to increase 2 to 4 percent.
In April, the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University forecast that home improvement spending will recover this year, with nearly five percent growth in 2010.
“The gradual recovery in the broader economy should encourage more remodeling spending by homeowners,” says Nicolas P. Retsinas, director of the Joint Center for Housing Studies. “This year could produce the first annual spending increase for the industry since 2006.”
Favorable market conditions support the projected increase in remodeling activity. “With house prices showing modest gains in most markets and the employment outlook beginning to stabilize, owners are likely to refocus attention on home improvements,” says Kermit Baker, director of the Remodeling Futures Program at the Joint Center for Housing Studies. “Home sales are trending up, which shows growing confidence in the housing market.”