This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Time for Lowe's to Improve

Along similar lines, the post-Hurricane Sandy boom benefited not just Home Depot but also lumber manufacturers Weyerhaeuser (WY) and Louisiana Pacific (LPX) with sustaining momentum. For Lowe's, however, that doesn't appear to have been the case.

Where Lowe's deserve credit is on the profit side. The company posted earnings excluding items of 49 cents per share, which is an 11% year-over-year improvement. Despite the miss on revenue, it was nonetheless encouraging Lowe's was able to advance both gross margin and operating margin by 10 basis points and 25 basis points, respectively -- enough to beat estimates.

All of that said, I don't believe it's time for investors take Lowe's to the proverbial woodshed -- at least not yet. I still like the company's management and I do see opportunities where Lowe's can turn things around.

For instance, it's been no secret that merchandising strategies have impeded the Lowe's progress, adding to Home Depot's advantage.

To that end, earlier this year Lowe's added Michael Jones as chief merchandising officer. With better attention to detail, which should drive in-store traffic and raise customer satisfaction, Lowe's should be able to narrow the gap. But it's not going to happen overnight.

Besides, this is just one part of the many problems the company must repair. Management still has deficits with staffing and operational efficiencies to fix. As bad as things may appear for Lowe's, investors should thank their lucky stars Lowe's is not as bad as JC Penney (JCP).

It's not a glowing endorsement. But I do want to keep my Lowe's analysis in the proper context. Despite these struggles, I still believe this stock should be bought and that Lowe's will overcome its challenges.

It's just a matter of time. But it's just going to require considerably more patience than investors may be willing to spend.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Richard Saintvilus is a private investor with an information technology and engineering background and the founder and producer of the investor Web site Saint's Sense. He has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
HD $113.86 0.00%
LOW $73.67 0.00%
AAPL $123.25 0.00%
FB $83.30 0.00%
GOOG $548.34 0.00%


DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs