Home-Improvement Stocks Decline After Sales Slowdown in MayBy
Shares of home-improvement and furnishing retailers declined on Tuesday after government sales data for May showed that the industry’s long growth run may be ending.
Home Depot Inc., Lowe’s Cos. and Williams-Sonoma Inc. all fell more than 2 percent in New York, while Tile Shop Holdings Inc. dropped as much as 6 percent. Interface Inc., a seller of carpet tiles, fell 4.4 percent.
Data released by the U.S. Census Bureau raised concerns about the stocks, many of which had been benefiting from a robust housing market. Sales at furniture and home furnishing stores climbed just 0.2 percent in May, the agency said. Revenue in this sector had averaged monthly gains of 4.4 percent so far this year. Growth of building materials and garden sales decelerated to 3.6 percent in May, from 6.1 percent the previous month, according to the Census Bureau.
Pier 1 Imports Inc., Restoration Hardware Holdings Inc. and Bed Bath & Beyond Inc. also declined in the wake of the report.
Along with auto dealers, home-improvement chains have been a bright spot in an otherwise lackluster retail environment. Rising home values have encouraged Americans to see their properties as investments, making them more willing to spend on fixing them up. The purchases have often come at the expense of other categories, especially clothing. That’s pushed more department stores and discounters such as Target Corp. to expand into the home category, according to Seema Shah, an analyst for Bloomberg Intelligence.
“You are seeing that home furnishings category growing at other retailers,” Shah said. “There’s more people vying for that pie.”
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.
- In One Tweet, Kylie Jenner Wiped Out $1.3 Billion of Snap’s Market Value
- China Regulator Seizes Anbang, Chairman Faces Fraud Prosecution
- The Two Words That Will Help Get an Airline Upgrade Over the Phone
- Snap CEO Evan Spiegel Got $638 Million in Year of Firm's IPO
- Apple Plans Upgrades to Popular AirPods Headphones