NEW YORK (AP) -- Home-improvement chain Lowe's Cos. is set to report its fiscal first-quarter earnings result before the market opens on Monday, and analysts will be watching for evidence that shows consumers' willingness to spend on their homes as the spring season kicked off.
WHAT TO WATCH FOR: As the housing slump continues, consumers have remained cautious in spending on their homes. Lowe's results will show if customers are still sticking to small maintenance projects under $50 or are increasingly taking on bigger renovations during the critical spring season, the biggest for home-improvement merchants.
Lowe's fourth-quarter results showed that homeowners took on more home improvement projects during the mild winter months. Investors will want to know if this trend continued.
Furthermore, analysts will want to know how the company's move away from limited-time sales in favor of lowering prices permanently in some areas to better compete with Home Depot is faring. The price cutting was largely finished late last year, and the company was working with vendors to lower costs.
The goal is to give shoppers more predictable pricing to encourage them to shop more often. That should help improve profits. Temporary promotions create pronounced peaks and valleys in the business, as shoppers show up for the deals and then retreat once they disappear. Lowe's had said it will be able to operate more efficiently if it runs a consistent business.
WHY IT MATTERS: Strong sales would be a sign that consumers are willing and able to spend more.
WHAT'S EXPECTED: Analysts expect profits of 42 cents on sales of $12.99 billion.
LAST YEAR'S QUARTER: Net income was 34 cents per share on revenue of $12.18 billion.
