By Denny Jacob

Home Depot and Lowe's largely delivered in their quarterly earnings report as they shrugged off concerns over tariffs and a subdued housing market, boosting analysts' hopes that the retailers can improve in the current operating environment.

Home Depot kicked things off Tuesday with much attention on its plan to work with suppliers and keep prices steady despite levies introduced by the Trump administration.

The Atlanta home improvement retailer kept its financial forecasts for the year unchanged and reported better-than-expected sales in the first quarter, particularly with comparable sales in the U.S. showing 0.2% growth.

"Home Depot is showing stability as the home improvement market is in transition," UBS' Michael Lasser said in a research note. He added that factors including rate stability setting in and homes that continue to age should gradually usher in a recovery for the company.

Competitor Lowe's followed up Wednesday with a similar performance. The Mooresville, N.C., company maintained its estimates for 2025, while a comp sales decline of 1.7% in the first quarter avoided the 2% decline expected by the Street.

As for prices, Chief Executive Marvin Ellison said Lowe's wasn't looking to give up market share to competitors and would keenly focus on competing on price.

"With what appears to be an increasingly stable base of core home improvement demand, despite macro/tariff uncertainties, we remain buyers of Lowe's as we expect continued improvement in sales/earnings" this year, Truist Securities' analysts said in a note.

Tariffs have posed the biggest unknown for companies across the board, in part because of their broad application on virtually every country as well as Trump's inconsistent message on them. After ratcheting up tariffs throughout April, the U.S. earlier this month agreed to temporarily lower certain tariffs on China while also reaching trade deals with other countries.

The on-again, off-again approach has introduced high levels of uncertainty for companies planning operations and consumers figuring out where to spend their money.

Home Depot said such dynamics have weighed on consumers' confidence to invest in bigger home projects that tend to rely on financing, though it's seen continued interest in smaller projects such as painting or yard work.

In addition to bigger-ticket home projects, both companies are waiting for a recovery in the housing market as elevated home prices and mortgage rates continue to leave would-be buyers on the sidelines. More homes being purchased and changing hands means more work being done around the house, something the retailers continue to expect in the long term as the market eventually returns to form.

Analysts agree a housing recovery is coming, but the exact timing remains unknown. For now, they're walking away from the companies' latest results with few concerns.

"Lowe's reported a quarter very similar to Home Depot's, perhaps even slightly better versus expectations," D.A. Davidson's Michael Baker and Keegan Cox said in a note.

Write to Denny Jacob at denny.jacob@wsj.com

(END) Dow Jones Newswires

May 21, 2025 13:36 ET (17:36 GMT)

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