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Bloomberg
an hour ago
- Automotive
- Bloomberg
Foreign Automakers' Share in China Is Only Set to Dwindle
The picture for foreign automakers in China doesn't get any rosier with new research from consultant AlixPartners showing local brands' dominance will climb to as high as 76% by 2030 as the market share of Japanese, European and US companies dwindles. And despite persistent competitive pressures, the nation's aggressive car price war is expected to evolve, rather than abate.
Globe and Mail
13 hours ago
- Business
- Globe and Mail
HD vs. LOW: Which is the Better Bet in the Home Improvement Space?
In the high-stakes arena of home improvement retail, two titans dominate the landscape — The Home Depot Inc. HD and Lowe's Companies, Inc. LOW. These industry heavyweights have long been locked in a competitive duel, each carving out a formidable presence in a sector that thrives on consumer demand for housing upgrades, DIY trends and professional construction projects. While both operate within the same core business — selling tools, appliances, building materials and services — their strategic playbooks, market positioning and financial trajectories reveal key differences. Home Depot continues to lead in market share and professional customer penetration, while Lowe's has been reshaping its model with targeted investments in digital infrastructure and store productivity. As macroeconomic conditions shift and consumer behavior evolves, this face-off explores how each retailer is positioned for sustained dominance and which is better built for long-term growth. The Case for HD As the largest home improvement retailer in the United States, Home Depot commands an estimated 25% share of the highly fragmented $1-trillion home improvement industry. In first-quarter fiscal 2025, the company posted $39.9 billion in sales, a 9.4% year-over-year increase, with strong performance across categories like appliances, electrical and building materials. Despite a slight comp decline of 0.3%, Home Depot's deep market penetration and diversified customer base — from DIYers to large-scale Pros — continue to reinforce its leadership. The retailer's portfolio, including its 2,350 stores and rapidly expanding SRS division, positions it to tap into a significant pool of deferred demand, estimated at $50 billion in home improvement spending. Home equity remains strong, as more than 55% of U.S. homes are more than 40 years old, signaling ongoing structural tailwinds. Home Depot is investing in the Pro ecosystem, enhancing order management, pricing and credit solutions. The SRS acquisition, spanning roofing, pool and landscaping, boosts organic growth while expanding reach into complex, large-ticket projects. Simultaneously, Home Depot is doubling down on digital innovation. Its 'Magic Apron' generative AI tool boosts e-commerce engagement, while fast, reliable delivery and strong in-stock rates elevate customer satisfaction. Digital sales rose 8% year over year, and features like AI-powered associate tools are sharpening execution at scale. The brand's trusted image, wide assortment and premium positioning ensure that Home Depot remains the go-to destination for home upgrades and contractor-grade solutions alike. HD is well-positioned to manage tariff headwinds, with more than 50% of sourcing in the United States and diversified supplier bases, where no single country outside the United States will account for more than 10% of purchases by fiscal 2026. The company plans to maintain stable pricing, leveraging productivity and SKU rationalization rather than passing on broad cost increases, potentially widening its advantage over smaller, less agile competitors. As market dynamics evolve, Home Depot's scale, strategy and innovation keep it firmly anchored as a long-term investment cornerstone. The Case for LOW Lowe's, the second-largest player in the U.S. home improvement market, holds 17-18% of the $1-trillion industry, with a strong focus on both DIY and Pro customer segments. In first-quarter fiscal 2025, the company generated $20.9 billion in sales despite 1.7% comps decline, which was largely attributed to soft early spring weather and reduced big-ticket DIY demand. With more than 1,700 stores nationwide and growing brand equity, Lowe's has a distinct market position focused on value, innovation and helpful customer service. Its recent acquisition of Artisan Design Group adds a growth lever, giving Lowe's access to the $50-billion planned Pro spend segment linked to home construction. Lowe's is scaling its Total Home strategy with targeted investments in Pro, online and in-store experience. The company saw mid-single-digit Pro comp growth in the fiscal first quarter and is expanding its reach through initiatives like MyLowe's Pro Rewards and the rollout of AI-powered tools to assist both customers and associates. Lowe's localization strategies and productivity efforts, including rural-specific assortments and private label innovations, position it to tap into underpenetrated and high-potential geographies and categories. These moves are building a more responsive and digitally connected omnichannel network for the future. On the tariff front, LOW has been proactive: nearly 60% of its sourcing is U.S.-based, with China exposure trimmed to 20%, and ongoing diversification is underway. Management has emphasized that it will remain price competitive, using a portfolio-based approach and deep vendor relationships to mitigate margin impacts. With strategic clarity, prudent financial management and a long runway for growth in Pro, digital and marketplace offerings, Lowe's presents a compelling investment case in a maturing but opportunity-rich sector. How does Zacks Consensus Estimate Compare for HD & LOW? Home Depot's fiscal 2025 sales are projected to grow 3.1% year over year to $164.5 billion and EPS is expected to decline 1.3% year over year to $15.04. HD's EPS estimates for fiscal 2025 moved up by a penny in the last 30 days. Home Depot's annual sales and earnings are slated to increase 4.4% and 9.2% year over year, respectively, in fiscal 2026. HD's Estimate Revision Trend Meanwhile, Lowe's fiscal 2025 sales are expected to increase 0.7% year over year to $84.3 billion, and EPS is anticipated to rise 2.4% to $12.29. LOW's EPS estimates for fiscal 2025 have moved up 0.4% in the past 30 days. Lowe's annual sales and earnings are slated to increase 3.4% and 9.2% year over year, respectively, in fiscal 2026. LOW's Estimate Revision Trend This clearly illustrates that both Home Depot and Lowe's have witnessed upward estimate revisions in the past 30 days. However, LOW's estimates indicate year-over-year increases in sales and earnings for fiscal 2025, whereas HD's EPS estimate suggests a decline. Price Performance & Valuation Comparisons of HD & LOW In the past year, Home Depot's stock had the edge in terms of performance despite recording a decline of 1.8%, including dividends. This has noticeably lagged the benchmark S&P 500's return of 9.5% but has outperformed Lowe's 7.3% decline. 1-Year Price Performance From a valuation perspective, Home Depot trades at a forward price-to-earnings (P/E) multiple of 22.31X, which is above its 5-year median of 22.28X, and Lowe's is trading at 16.58X, below its 5-year median of 17.59X. Home Depot stock seems pricey. Its premium valuations reflect its superior alignment with Pro customers, and well-recognized and trusted private-label portfolio, reinforcing its market leadership. If the company sustains its aggressive focus on Pro contractors and investments in supply-chain efficiency, the premium can be warranted. Conversely, Lowe's stock looks cheap from a valuation perspective. LOW has made significant strides in recent years by refining its operations, expanding its Pro segment and enhancing digital capabilities, aiming to close the gap with its bigger rival, highlighting its growth prospects. Lowe's appears more attractively valued on a relative basis, suggesting an upside if execution improves. Dividend Analysis: HD & LOW Apart from stability and growth potential, Home Depot and Lowe's tend to attract investors with their strong record of paying out regular dividends. These companies have consistently raised dividend payouts, reflecting their confidence in their earnings growth potential. Home Depot offers a dividend yield of 2.64%, supported by a payout ratio of 61%, signaling a balance between rewarding shareholders and reinvesting in the business. HD has a five-year dividend growth rate of 10.6%. (Check HD's dividend history here) Lowe's, with a dividend yield of 2.17% and a lower payout ratio of 39%, provides more room for dividend growth. LOW has a five-year dividend growth rate of 19.1%. (Check LOW's dividend history here.) Conclusion Home Depot and Lowe's demonstrate solid fundamentals, strong brand equity and deep industry expertise. Home Depot remains the market leader with a broader scale, a dominant Pro business and robust financial efficiency. However, Lowe's is quickly narrowing the gap through targeted investments in digital innovation, marketplace expansion and strategic acquisitions. Its sharper focus on store productivity, a revitalized Pro strategy and growing online presence position it well to capitalize on the evolving demands of both DIYers and professional contractors. What ultimately strengthens the investment case in favor of Lowe's is its compelling valuation and stronger upside potential. Still, in the early stages of its transformation, Lowe's has several self-driven growth levers that appear underappreciated by the market. Recent upward revisions to earnings estimates further underscore growing investor confidence in the company's long-term trajectory, even amid macro uncertainty. With a disciplined strategic roadmap and improving operational execution, Lowe's emerges as the more compelling opportunity for investors seeking value and momentum in the home improvement space. Both HD and LOW currently carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Only $1 to See All Zacks' Buys and Sells We're not kidding. Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent. Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators, and more, that closed 256 positions with double- and triple-digit gains in 2024 alone. See Stocks Now >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lowe's Companies, Inc. (LOW): Free Stock Analysis Report The Home Depot, Inc. (HD): Free Stock Analysis Report
Globe and Mail
17 hours ago
- Business
- Globe and Mail
Sobeys parent Empire beats profit growth estimates, raises dividend
Grocery retailer Empire Co. Ltd. EMP-A-T beat analysts' estimates for profit growth in the fourth quarter, reporting that its store chains such as FreshCo and Sobeys took market share from competitors. The Stellarton, N.S.-based company reported on Thursday that sales grew in both the company's FreshCo discount stores, as well as its full-service grocery stores such as Sobeys, Safeway and IGA. Same-store sales – an important industry metric that tracks sales growth not tied to new store openings – were up 3 per cent in the quarter ended May 3, compared to the same period last year. Empire reported net earnings grew to $173-million or 74 cents per share in the fourth quarter, compared to $149-million or 61 cents per share the prior year. That exceeded analysts' expectations of $164.5-million or 71 cents per share, according to the consensus estimate from S&P Capital IQ The company also announced a 10-per-cent increase in its quarterly dividend paid to shareholders. Fourth-quarter sales grew to $7.6-billion, up 3 per cent compared to the prior year, driven by strong performance at grocery stores, partly offset by lower sales at the company's gas stations as fuel prices fell. The expansion of the Farm Boy and FreshCo store chains contributed to profit growth, as did initiatives aimed at reducing 'shrink,' an industry term for products that are lost before they can be sold – such as through theft or spoilage. This time last year, Empire made the decision to pull back on the pace of expansion of its Voilà e-commerce service, saying the market for online groceries in Canada was smaller than expected. After ending its exclusive partnership with technology provider Ocado Group PLC earlier than planned, Empire launched partnerships with third-party delivery companies Instacart and Uber Eats, which have contributed to growth. Online sales rose by 80.2 per cent in the quarter. The company continues to cut costs in its online service as it seeks to reach profitability. Construction of a fourth e-commerce distribution centre, underway in Vancouver, remains on hold, and will resume 'once e-commerce penetration rates in Canada increase,' according to a press release issued on Thursday.
Wall Street Journal
a day ago
- Business
- Wall Street Journal
The Battle Over the Future of Swatch: Luxury or Fun?
When American fund manager Steven Wood set his sights on the storied Swiss watchmaker Swatch UHR 0.26%increase; green up pointing triangle Group, he tried a suitably stylish opening gambit. He sent Chief Executive Nick Hayek cigars; a favorite book, 'The Luxury Strategy' by Jean-Noël Kapferer and Vincent Bastien; and a handwritten note laying out opportunities he saw for Swatch's luxury brands to recapture market share.
Globe and Mail
2 days ago
- Business
- Globe and Mail
Walmart Sees Continued Comps Gains: Will Broad-Based Strength Support?
Walmart Inc. WMT continues to prove its retail dominance with another strong record in comparable sales. For the first quarter of fiscal 2026, Walmart U.S. reported comparable sales growth of 4.5%, excluding fuel, driven by transaction improvement of 1.6% and an average ticket increase of 2.8%, as well as strong e-commerce growth. The gains were broad-based, with notable momentum in food and consumables, wherein Walmart continues to gain market share. Health and wellness also surged with high-teens growth, thanks to strong prescription volumes and over-the-counter products. Complementing the strong performance at Walmart U.S., Sam's Club U.S. posted a robust 6.7% increase in comparable sales, excluding fuel. The rise was primarily volume-driven, with strength in Member's Mark products. Walmart's ability to deliver consistent comparable sales gains stems from its balanced omnichannel strategy, featuring faster delivery speeds, which includes a 91% year-over-year rise in sub-three-hour delivery, disciplined inventory management and aggressive price rollbacks. More than 5,000 items saw price reductions in the fiscal first quarter, enhancing Walmart's value proposition across key categories. The retailer also leaned on private label strength, with grocery private brand penetration up 60 basis points compared with the last year. This performance demonstrates Walmart's agility and customer relevance amid economic and trade-related headwinds. As the company navigates tariff-related pressures, the replenishment-heavy model and deep supply-chain partnerships are helping it remain flexible, protect margins and support price leadership in a volatile cost environment. How are WMT Rivals TGT & COST Approaching Comparable Sales? While Walmart U.S. delivered comparable sales growth, two of its competitors, Target Corporation TGT and Costco Wholesale Corporation COST, offer an instructive contrast. Target is pursuing long-term growth through digital expansion, marketplace scaling and store investments. Despite a 3.8% decline in comparable sales in the first quarter of fiscal 2025, Target continues to see strength in same-day services like Drive Up and Shipt. The company is also growing the Target Plus marketplace, positioning it for future comparable sales improvements through innovation and customer convenience. Costco, by contrast, reported comparable sales growth of 5.7% in the third quarter of fiscal 2025, with U.S. comparable sales up 6.6%. Its brand name, geographical reach and curated product breadth continue to attract value-conscious shoppers. Costco's favorable product mix, steady store traffic and member-driven pricing model underpin solid comparable sales momentum. WMT's Price Performance, Valuation & Estimates Shares of Walmart have gained 9.7% in the past three months compared with the industry 's growth of 9.3%. From a valuation standpoint, WMT trades at a forward price-to-earnings ratio of 34.8X, significantly up from the industry's average of 31.97X. The Zacks Consensus Estimate for WMT's fiscal 2026 earnings implies year-over-year growth of 3.2%, whereas its fiscal 2027 earnings estimate indicates a year-over-year uptick of 11.6%. WMT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. Today, See These 5 Potential Home Runs >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Target Corporation (TGT): Free Stock Analysis Report Walmart Inc. (WMT): Free Stock Analysis Report Costco Wholesale Corporation (COST): Free Stock Analysis Report This article originally published on Zacks Investment Research (
