LOW

Huge Improvement in Home Improvement; Lowe’s Losing Market Share

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Earlier this week, the US’ two home improvement giants, Home Depot (click ticker for report: ) and Lowe’s (click ticker for report: ) posted robust second-quarter results, riding the housing recovery to success. Let’s dive into recent performance. Home Depot Home Depot’s second-quarter sales were 9.5% higher than a year ago at $22.5 billion, handily exceeding consensus estimates. Earnings per share jumped 23% year-over-year to $1.24, also higher than consensus expectations. Free cash flow stands at $4.1 billion year-to-date, equal to 9.9% of total revenue. Source: Valuentum, Company Filings Same-store sales expansion at Home Depot during the second quarter was fantastic, as total same-store sales jumped 10.7% year-over-year driven by an 11.4% growth rate in the US. Some sales of … Read more

Dividend Increases for the Week Ending May 31

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Below we provide a list of firms that upped their dividends for the week ending May 31. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports, please click here. Firms Raising Their Dividends This Week American Eagle Outfitters (AEO): now $0.125 per share quarterly dividend, was $0.11. Canadian Imperial Bank of Commerce (CM): now C$0.96 per share quarterly dividend, was $0.94. CryoLife (CRY): now $0.0275 per share quarterly dividend, was $0.025. Daktronics (DAKT): now $0.12 per share semi-annual dividend, was $0.115. Eastern Insurance Holdings (EIHI): now $0.11 per share quarterly dividend, was $0.09. Hill-Rom Holdings (HRC): now $0.1375 per share quarterly dividend, was $0.125. Lowe’s Companies (LOW): now … Read more

Don’t Get Too Floored By Lumber Liquidators’ Performance

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Over the past year, one of the more amazing performers has been hardwood floor supplier Lumber Liquidators (click ticker for report: ). Shares have steadily climbed a whopping 185% over the past year and are up 55% year-to-date. However, we do not believe such robust performance is likely to continue. Fundamentally, little is wrong with the company’s recent performance. In fact, Lumber Liquidators is benefitting from a strong rebound in the US housing market. Flooring is one of the more obvious features of a house, making it an obvious area to improve from almost all aspects of ownership, whether it be selling, buying, or renting. With hardwood floors still in vogue, the firm is capitalizing on this demand, experiencing a … Read more

Home Depot Posts a Blowout Fourth Quarter

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Home improvement retailer Home Depot (click ticker for report: ) announced wonderful fourth quarter results Tuesday morning. Revenue rose 14% year-over-year to $18.2 billion, easily exceeding consensus expectations. Earnings also exceeded consensus estimates, growing 36% year-over-year to $0.68 per share. Same-store sales expansion outperformed the 1.9% growth rate we saw at Lowe’s (click ticker for report: ) earlier this week, jumping 7% year-over-year and 7.1% in the US. Management noted that large ticket items were the standout performer, saying: Total comp transactions grew by 1.7% for the quarter, while average ticket increased 5.6%. Our average ticket increase was impacted somewhat by commodity price inflation in lumber and copper, which contributed approximately 80 basis points to comp. Transactions for tickets under … Read more

Lowe’s Posts a Solid Fourth Quarter…Thanks Sandy

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Home improvement retailer Lowe’s (click ticker for report: ) reported modestly better than anticipated fourth quarter results Monday morning. Revenue fell 5% year-over-year to $11 billion, which was a touch better than expected. Earnings were flat compared to the year-ago quarter, coming in at $0.26 per share, but that figure also exceeded the consensus expectation. Though Lowe’s benefited from an extra selling week in fiscal year 2012 (ended January 2013), the results were solid. Hurricane Sandy rebuilding efforts helped stores remain productive after a decent third quarter, with same-store sales rising 1.9%. In total, management believes hurricane-related purchases added 70 basis points to same-store sales growth, and the firm anticipates Sandy will have a positive influence on fiscal year 2013 … Read more

Leucadia: Berkshire Light?

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After acquiring the remaining shares outstanding of Jefferies (JEF) a few months ago, Leucadia (LUK) has come into the spotlight. This under-the-radar holding company has been compared to Berkshire Hathaway (BRK.A) in the sense that it owns several unrelated companies and uses the cash flows to invest in different businesses. However, calling the two firms similar is a bit of a misstatement given Berkshire’s enormous insurance operations, and a slightly different investing style. Unlike Berkshire, which has an enormous “elephant gun” able to acquire relatively large companies with ease (Berkshire also tends to concentrate on reliable, large cap companies with strong balance sheets), Leucadia concentrates on deep value in struggling or unloved companies and industries. Interestingly enough, the companies are … Read more

Toll Brothers’ Fourth Quarter Results Were Fantastic

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Tuesday morning, one of the nation’s premier homebuilders, Toll Brothers (click ticker for report: ) reported spectacular fourth quarter results. Revenues surged 48% year-over-year to $632.8 million, well ahead of consensus expectations. Earnings per share jumped to $2.35 per share from $0.09 a year ago thanks to the release of deferred tax assets. Pretax income jumped nearly 300% year-over-year to $60.7 million. Key metrics for Toll’s business were mostly strong across the board. Net signed contracts in the fourth quarter jumped 70% year-over-year to 1,098 units, with a 75% surge in value to $684.1 million. The firm’s backlog jumped 54% to 2,569 units, with the value of that backlog increasing 70% to $1.67 billion. Stronger pricing also helped gross margins … Read more

Lowe’s Results Continue to Improve, But Lag Home Depot

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Hardware retailer Lowe’s (click ticker for report: ) reported third quarter results that were roughly in-line with consensus expectations. Revenue grew a paltry 1.9% year-over-year to $12.1 billion, slightly better than expected. Earnings improved tremendously thanks to higher gross margins and cost cutting, nearly doubling year-over-year to $0.35 per share. Same-store sales growth didn’t fare any better than the company-wide sales growth, increasing 1.8% in both the US and company-wide, though we expect some acceleration due to Hurricane Sandy in the fourth quarter (management agrees). Still, the pace of expansion doesn’t compare favorably to Home Depot (click ticker for report: ), which has been growing same-store sales closer to 4.2% due to its superior execution, in our view. Gross margins … Read more

Housing Market Strength Propels Home Depot

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Thanks to strength in the US housing market, home improvement giant Home Depot (click ticker for report: ) posted terrific third quarter results this morning. Revenues grew 4.6% year-over-year to $18.1 billion, easily exceeding consensus estimates. Earnings, excluding the closing of some unproductive stores in China, increased 23% year-over-year to $0.74 per share. Increased productivity helped tremendously, as aggregate same-store sales grew 4.2% year-over-year, and US same-store sales increased 4.3% year-over-year, driven by higher average tickets and more transactions. Gross margins ticked up about 20 basis points year-over-year to 34.6%, reflecting the higher average ticket prices and better appliance sales. Appliance sales are a good indicator of consumer confidence in the housing market, in our view. Management noted that credit … Read more