Lowe's quarterly comparable sales fell well short of Wall Street's estimates. As Fred Katayama reports, that's a sharp contrast to the strong earnings posted by rival Home Depot.
A tale of two retailers. Focusing on appliances and other indoor products resulted in disappointing quarterly sales at Lowe's. That's a sharp contrast to the strong earnings reported by archrival Home Depot. Lowe's comparable sales rose nearly 2 percent, but that was well below analysts' expectations. Profit rose, but that, too, was shy of Wall Street's targets. Lowe's blamed the results on its move to push indoor products at the expense of outdoor products like plants and patio furniture. It's those outdoor goods that make up more than a third of the company's typical first quarter sales. The retailer says it'll now include more low-priced products and change its marketing strategy. That, it says, should enable it to make up for the lost sales over the next six months. Lowe's caters to do-it-yourself customers, That has led it to lag Home Depot, whose focus on professional contractors has helped it benefit more from the strength in the housing market. Thomson Reuters' consumer research director Jharonne Martis on what gives Home Depot the edge: SOUNDBITE: JHARONNE MARTIS, DIRECTOR OF CONSUMER RESEARCH, THOMSON REUTERS, (ENGLISH) SAYING: "Their market campaigns have been very good in bringing in the high end consumer. They've also been selling big ticket items more than Lowe's has. And as a result, their earnings and their same-store sales have been significantly better." Lowe's shares fell Wednesday, eroding some of their 11 percent gain this year.