Unpacking Q1 Earnings: Lowe's (NYSE:LOW) In The Context Of Other Home Furnishing and Improvement Retail Stocks

Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Lowe's (NYSE:LOW) and the best and worst performers in the home furnishing and improvement retail industry.

Home furnishing and improvement retailers understand that ‘home is where the heart is’ but that a home is only right when it’s in livable condition and furnished just right. These stores therefore focus on providing what is needed for both the upkeep of a house as well as what is desired for the aesthetics of a home. Decades ago, it was thought that furniture and home improvement would resist e-commerce because of the logistical challenges of shipping a sofa or lawn mower, but now you can buy both online; so just like other retailers, these stores need to adapt to new realities and consumer behaviors.

The 7 home furnishing and improvement retail stocks we track reported an ok Q1; on average, revenues beat analyst consensus estimates by 1.5%. while next quarter's revenue guidance was 4.7% below consensus. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and while some of the home furnishing and improvement retail stocks have fared somewhat better than others, they collectively declined, with share prices falling 3.5% on average since the previous earnings results.

Lowe's (NYSE:LOW) Founded in North Carolina as Lowe's North Wilkesboro Hardware, the company is a home improvement retailer that sells everything from paint to tools to building materials.

Lowe's reported revenues of $21.36 billion, down 4.4% year on year, exceeding analysts' expectations by 1.2%. Overall, it was an ok quarter for the company with a narrow beat of analysts' earnings estimates but a miss of analysts' gross margin estimates.

"We are pleased with our start to spring, driven by strong execution and enhanced customer service," said Marvin R. Ellison, Lowe's chairman, president and CEO.

The stock is up 2.6% since reporting and currently trades at $235.20.

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Best Q1: Williams-Sonoma (NYSE:WSM) Started in 1956 as a store specializing in French cookware, Williams-Sonoma (NYSE:WSM) is a specialty retailer of higher-end kitchenware, home goods, and furniture.

Williams-Sonoma reported revenues of $1.66 billion, down 5.4% year on year, in line with analysts' expectations. It was a very strong quarter for the company with an impressive beat of analysts' gross margin and earnings estimates.

Although it had a great quarter compared its peers, the market seems unhappy with the results as the stock is down 2.4% since reporting. It currently trades at $153.40.

Weakest Q1: RH (NYSE:RH) Formerly known as Restoration Hardware, NYSE:RH (NYSE:RH) is a specialty retailer that exclusively sells its own brand of of high-end furniture and home decor.

RH reported revenues of $727 million, down 1.7% year on year, in line with analysts' expectations. It was a weak quarter for the company with a miss of analysts' earnings estimates.

As expected, the stock is down 5.7% since the results and currently trades at $261.02.

Home Depot (NYSE:NYSE:HD) Founded and headquartered in Atlanta, Georgia, Home Depot (NYSE:HD) is a home improvement retailer that sells everything from tools to building materials to appliances.

Home Depot reported revenues of $36.42 billion, down 2.3% year on year, in line with analysts' expectations. Taking a step back, it was a mixed quarter for the company with a narrow beat of analysts' gross margin estimates.

The stock is up 4% since reporting and currently trades at $354.64.

Floor And Decor (NYSE:FND) Operating large, warehouse-style stores, Floor & Decor (NYSE:FND) is a specialty retailer that specializes in hard flooring surfaces for the home such as tiles, hardwood, stone, and laminates.

Floor And Decor reported revenues of $1.10 billion, down 2.2% year on year, falling short of analysts' expectations by 1.5%. Zooming out, it was a mixed quarter for the company with a decent beat of analysts' earnings estimates but underwhelming earnings guidance for the full year.

Floor And Decor achieved the highest full-year guidance raise but had the weakest performance against analyst estimates among its peers. The stock is down 17.2% since reporting and currently trades at $93.44.

This content was originally published on Stock Story