The housing crisis drags on with no end in sight, and unemployment remains high. So you'll forgive me if I find the notion of better times ahead for Home Depot (NYSE: HD) and Lowe's (NYSE: LOW) a bit too difficult to buy.
Home Depot was supposedly one of the bright spots in today's down market. Its third-quarter net income increased 21%, to $834 million, or $0.51 per share. Its profit bested analysts' expectations for $0.48 per share.
Home Depot's sales weren't mind-blowing by any stretch, although they did reach positive territory. Net sales increased 1.4%, to $16.6 billion, and same-store sales jumped 1.4%, with a 1.5% increase in the U.S.
Rival Lowe's saw net income surge 17.4%, to $404 million, or $0.29 per share. Net sales increased 1.9% to $11.6 billion, with comps increasing an anemic 0.2%. Lowe's missed analysts' expectations for $11.75 billion in revenue.
The home-improvement retailers are safer stocks than homebuilders like DR Horton (NYSE: DHI), KB Home (NYSE: KBH), or Toll Brothers (NYSE: TOL). Those who do stay in their homes will eventually want to put some work into them, whether to remodel or simply perform routine maintenance. However, the housing market's continuing troubles suggest we won't see anything like the heady growth that home-oriented stocks enjoyed during the housing boom and bubble.
General-interest retailers like Wal-Mart, Target (NYSE: TGT), not to mention truly deep discounters like Family Dollar (NYSE: FDO), look like far more defensive stocks than the home improvement retailers at the moment. Do you agree? Discuss the topic with other Fools in the comment boxes below.
