Lowe's Profits Top Estimates as TJX Raises Outlook

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00:00The Home Depot report yesterday that I think had a lot of people concerned, and the question was,

00:04okay, the lowering of guidance from Home Depot, since shares lower yesterday on concerns about

00:09consumer spending, were we going to hear the same thing from Lowe's? We didn't.

00:13You know, that was kind of the expectation going in this morning, that we would kind of usually get

00:17copy-paste results from Lowe's. But it's interesting, I think with Lowe's, we kind of

00:20tend to forget, it's a little bit of this like turnaround story. So they've been really like

00:24doing some of these initiatives to get their business back growing again. So they've really

00:29focused on things like their digital expansion. It seems to be gaining a lot of traction. They

00:34talked a lot about AI. I found this commentary really interesting about how it's already,

00:38their AI assistant kind of helps you shop, you ask what you're looking for. It's already getting

00:42a million queries a month, and they say it doubles the conversion rate. So it seems like they're

00:47making really good progress there. And another thing that they're doing to kind of copy Home

00:50Depot is expand their offerings to professional contractors. And that also seems to be really

00:56gaining traction. They had around $9 billion acquisition last quarter to kind of build out

01:00that business a little more. So it just seems like the divergence here with Lowe's and Home Depot

01:04is that just Lowe's is just making really steady progress on executing some of these strategies,

01:09borrowing a lot of Home Depot's businesses, but doing it maybe a little bit, at least the

01:14appearance is maybe doing it a little bit better than Home Depot at the moment.

01:16I will say Lowe's is still down on the year, about 7% to the downside. Home Depot,

01:20though, is down about 14% so far here in 2025. Hey, Lillie, I want to go to TJX because it did

01:26hit, I think, a 52-week high in today's session. It's up 21% a year to date, but right now the

01:31stock's a little changed, a little bit lower, a bit of a range, like more than a 4% range from

01:36peak to trough today. So what's going on at TJX? Although I should be able to tell everybody

01:40what's going on at TJX. I mean, TJX is an interesting story today. You know, it really shows that

01:45consumers are looking for value. They want to get popular brands, they want to get designer

01:50brands, but they don't want to spend the premium that comes with a lot of other retailers.

01:54And I also love, like, the whole TJ Maxx. I don't know how much you guys spend in TJ Maxx.

01:59I've never been there.

02:00On occasion.

02:01I know. I don't know if it's a regional thing. Like, I didn't have one where I was growing

02:04up.

02:04In California?

02:05Well, where I'm from in California. I mean, it's a big state, but like, no, we had, like,

02:09we didn't have TJX. Maybe we do now.

02:11Well, there's this, like, discovery factor, right?

02:13If you see something, like, people always say, buy it, because it won't be there next

02:18time around.

02:19Why do people love TJX so much? Why is Scarlett talking about her credit card? Why is, I mean,

02:24Mary Ross Gilbert from Bloomberg Intelligence, she said the same thing earlier on Bloomberg

02:27Intelligence Radio. She loves it, too. Why do people love it?

02:31Well, I think people love the, like, thrill of the hunt experience of going into a TJ Maxx,

02:35not knowing what they're going to find, finding something from an expensive brand that maybe

02:39normally they wouldn't buy, or that's just much, much cheaper than they would find at another

02:43retailer. So, I think it's a mix of the value. Like, you get really good deals, and, you know,

02:49you have that experience of not knowing what you're going to get.

02:52I forgot, too, that you do get a discount when you open, but you get coupons for when

02:56you spend. So, like, you have, like, a $5 coupon or a $10 coupon. So, it's like,

03:01It's the hunch, the bargain.

03:01And then I was like, honey, I have a coupon. And they're like, yeah, but you're still paying

03:04for stuff. Let's go to Target. What do we see with Target here, Red?

03:08Yeah, Target continuing this slow kind of decline. They're still kind of struggling

03:13through another kind of turnaround story similar to Lowe's, but it doesn't seem to be executing

03:17as well. Sales were down 2.7% for the quarter. That's, you know, it's been three consecutive

03:24quarters now of falling sales. I think with, just to bring TJ Maxx back in, because it is

03:29our favorite topic here at the moment.

03:31There's also home goods, too, where you can buy all the pillows you want.

03:34Correct, right? So, Target used to have that sort of, like, fun surprise factor.

03:39So true.

03:39Right? And it seems like they've sort of lost their way a little bit there. And I think

03:43that maybe is still kind of reflected in some of the results. They've tried to move into

03:47things like grocery, but they're just not able to kind of compete in the way that Walmart

03:51is there, just in terms of scale. So, it still kind of remains to be seen where Target

03:57can kind of reinvigorate that growth, can reinvigorate some of that excitement that they used to have.

04:01Can I just say, Target, what they used to be known for and used to do it so well is they

04:06had these collaborations with Isaac Mizrahi, Alexander McQueen, Missoni. I mean, I remember

04:12people lining up before the store opened. I was like, when are they, you know, going to

04:17bring out the thing, you know, bring out the collection? And people would just, you know,

04:21you know, go there and buy tons and tons of stuff. Like, they just were kind of cool in

04:24how they did that kind of stuff.

04:26Yeah. And that's kind of the new CEO's priority. He really wants, when he comes in in February,

04:31he really wants to be able to bring fun back to Target and bring that kind of excitement back.

04:36You know, as people who watch and listen to our program regularly know, we're trying to figure

04:40out where this economy is, where the consumer fits into this economy. We're going to hear from

04:43Gap later this week. We get Walmart earnings later this week as well. That will certainly shed a

04:47light. But Lily, ahead of that, thus far, we've heard from these retailers. What's the picture

04:54that they're painting the consumer? I mean, I think we know the consumer is pretty stressed.

04:59I think they're stressed, but they're still spending. A lot of the companies I cover,

05:03so those specialty retailers, so like a Gap or Victoria's Secret haven't reported yet. So I

05:08think that will be really interesting and kind of rounding out the picture, especially around

05:12what young consumers are doing. You cover Crocs. That was a very hot company for a long time.

05:16Yeah. It's had some troubles lately. It's had some troubles lately. Is that because

05:20the consumer or is it because of Crocs? It seems like a mixed story there. Yeah. I think, I mean,

05:25I think they saw some people pulling back and I also think they've kind of struggled to get people

05:30excited. Yeah. Right. Come on back in here. Cause I do think, you know, that's one of the things we

05:34are trying to figure out how the consumer is doing and not every consumer is the same. And again,

05:39we do talk about a wealthier consumer has seemed to continue to spend. Are you picking up on any kind

05:45of narratives or threads, especially I always feel like on the call with the analysts, our investors,

05:49that's where you start to get some better color about what's going on. Yeah, definitely. I think

05:53it's, it's interesting. Like I feel like some of the sentiments that Lily said are being echoed across

06:00like Lowe's Home Depot as well, where like there is this idea of still the resilient consumer. Like

06:04I feel like we heard that a few quarters ago, like consumers are still resilient. We heard this also

06:09in restaurants a couple of weeks ago of, you know, these richer consumers are also trading

06:14down into fast food, things like that. So it's like, people are managing, right? But it's just

06:18like, they're doing it in these sort of like interesting ways. Like we all are kind of feeling

06:22these same pressures that we're talking about. You know, we can all have real life examples, but

06:26um, yeah, no, it's, it's still like, uh, it's still like that. I don't feel like we can't like

06:30make a definitive call yet to say the consumer is weak. Right.

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