Home Depot Vs. Lowe’s

November 15, 2011 by staff 

Home Depot Vs. Lowe’s, Lowe’s Cos Inc (LOW.N) reported better-than-expected quarterly results and laid out a blueprint to win back shoppers from larger rival Home Depot Inc (HD.N), even as skeptics said they saw little chances of a fast turnaround at the smaller home improvement chain.

From stepping up efforts to attract online shoppers to slashing prices permanently, Lowe’s is reworking its strategy to outdo the market leader.

“We believe that through kind of the first part of 2012, we start to make up some ground and you start to see maybe us closing that gap in the second half of 2012,” CEO Robert Niblock told Reuters in a telephone interview.

Lowe’s, a victim of the weak economy and housing market, has been slower to cut costs than Home Depot, whose sales at stores open a year or more have beaten its rival’s for nine straight quarters.

In the third quarter, Lowe’s same-store sales performance was lackluster and below someanlysts’ estimates. Sales at stores open at least a year rose just 0.7 percent. Analyst Alan Rifkin at Barclays was looking for a 1 percent increase.

Demand for expensive renovations is still weak, Niblock said.

“For big-ticket categories to become really healthy, primarily we need home prices to start appreciating,” he said, adding that U.S. consumers still have a “fragile mindset” due to high unemployment and economic uncertainty.

Home Depot is due to report its quarterly results on Tuesday. Analysts across the board expect the market leader to outperform Lowe’s as it stands to benefit from recent moves to improve its distribution and customer service and cut costs.

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