Though Home Depot (NYSE: HD) and Lowe's (NYSE: LOW) latest quarterly results suggest that investors are feeling more at home with home-improvement companies, Fools shouldn't roll out the welcome mat for these stocks yet.

Home Depot increased first-quarter net income by 41% to $$725 million, or $0.43 per share. Revenue increased 4.3% to $16.9 billion, and same-store sales increased 4.8%. (Comps improved by 3.3% here in the U.S., too.)

The ultra-big-box retailer also updated its guidance, saying it now expects fiscal 2010 sales to increase 3.5%, and earnings to increase 21% to $1.88 per share.

Lowe's tidings weren't quite so heartwarming. Its first quarter net income increased 2.7% to $489 million, or $0.34 per share. Revenue increased 4.7% to $12.4 billion, and comps jumped 2.4%.

While Lowe's management expects "solid demand" through the year, it said 2010 will be a "year of transition" for its industry. Our still-ailing economy makes me suspect that marble countertops, Berber carpets, and the other trappings of home-improvement mania could remain bubble-era bygones some time to come.

Investors should remain highly discriminating when buying retail stocks. Economic optimism has buoyed many such investments, but folks caught up in the euphoria seem to ignore the influence of high unemployment and a still-stagnant housing market. Consumers rallied for a recent spending comeback, but I'm not sure they can sustain their renewed largesse.

Unlike low-cost retail stocks Costco (Nasdaq: COST) and Wal-Mart (NYSE: WMT), home-improvement retailers rely on the housing industry -- and consumers' confidence in that market -- for growth. Until one or both of those factors brighten, home-improvement stores will remain haunted by risk.

Do home-improvement retail stocks make a good foundation for a healthy portfolio? Or should investors search for greener pastures in retail? Let us know in the comments boxes below.

Home Depot, Lowe's, Costco, and Wal-Mart are Motley Fool Inside Value recommendations. Costco is a Motley Fool Stock Advisor selection. The Fool owns shares of Costco. Try any of our Foolish newsletters free for 30 days.

Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy.