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Far removed from the noise of weekly and monthly sales updates,


(LOW) - Get Lowe's Companies, Inc. Report


Home Depot

(HD) - Get Home Depot, Inc. Report

have emerged as the quiet stalwarts of the retail sector.

While mass merchandisers


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report weekly on their sales, and fashion-driven apparel stores post updates monthly, the big home improvement chains have been reporting only quarterly. But their solid results have had a way of keeping investors happy nonetheless.

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Sticking with its policy of reporting only the quarterly results required by the

Securities and Exchange Commission

, Lowe's Monday handed Wall Street another stellar report card. The No. 2 home improvement retailer beat expectations, posting a 17% jump in second-quarter profits and offering strong earnings guidance for the rest of the year.

Now, analysts will be expecting its market leading counterpart, Home Depot, to show similar success Tuesday afternoon. Shares of both companies were recently edging higher.

Lowe's said it earned $838 million, or $1.05 a share, for the quarter ended July 29, up from $700 million, or 87 cents a share, in the year-ago period. Analysts were expecting earnings of only $1.02 a share, according to consensus estimates. For the year, Lowe's said it expects to earn $3.31 to $3.37 a share, compared to Wall Street's expectations for profits totaling $3.29 a share.

Shares of Lowe's were recently showing modest gains, up 11 cents to $65.30. That marked a reversal from an earlier selloff that analysts attributed in part to the company's observation that its same-store sales, or sales at stores open at least a year, were so far tracking at the low end of its estimate for 4% to 6% gains over the same quarter last year.

Craig Johnson, president of retail consulting firm Customer Growth Partners, shrugs off any concerns about the company based on short-term sales trends.

"This company has three things going for it, which is a very rare thing to find in a public company," Johnson says. "They do an excellent job of managing costs and expenses on the financial side. They are right on trend with the sweet spots in their market as far as marketing and merchandising, like their kitchen improvement goods and their energy-efficient appliances. Also, they're riding a big rising tide with consumers continuing to invest in their homes."

Real estate investing is a controversial subject these days, as years of low interest rates have fueled a binge in home buying and refinancing that many economists believe has created a bubble. SG Cowen analyst Joseph Feldman says that while this may be a legitimate concern for real estate prices, home improvement retailers are well insulated.

"I know there's concern about a slowdown in the housing market, but if you're not buying new homes, you're more likely to maintain the one you have or improve it," Feldman says. He doesn't own shares of Lowe's or Home Depot, and his firm has no investment banking relationship with the companies. "Even if there are some declines in real estate prices in certain markets, I think people will still be shopping at home improvement stores."

On the financial side, Lowe's gross margins rose to 34.8% during the quarter, up from last year's 33.3%. Sales for the quarter increased to $11.9 billion, up from $10.2 billion, while its same-store sales for the quarter rose 6.5%.

On a conference call with analysts, Lowe's chairman and chief executive, Robert Niblock, said sales gains were driven by customers completing their "spring weather-delayed projects."

Home Depot is expected to post earnings of 79 cents a share for the quarter, up from last year's 70 cents a share. Its shares were recently trading up 26 cents to $41.54.

"I'll be very surprised if Home Depot doesn't deliver strong results that are right on par with Lowe's," Johnson says, noting that both companies are stealing market share from second- and third-tier players in the home improvement space.

"There's a phenomenon in a number of industries where you see a strong No. 1 and No. 2 player that are both thriving," he says. "That's what we're seeing with Lowe's and Home Depot. There's room for both of these companies to thrive, and there are endless growth possibilities in international markets for this sort of business model."