The Home Improvement Industry Keeps On Improving
Aug 20th 2013 3:40PM
Updated Aug 20th 2013 3:44PM
American Woodmark beat on both revenue and earnings estimates this morning, with net sales up 20%. The company uses a fixed cost structure, which means that it had some significant margin gains as well. But does all this good news now mean that the company is burnt out? Motley Fool analyst Tim Hanson doesn't think so -- he sees plenty of runway left for the company as remodeling spending ticks upward.
Speaking of remodeling, the home improvement industry as a whole continues to look better and better. Home Depot reported great numbers, with same-store sales rising nearly 11% compared to a roughly 2% increase last year. Other large home improvers like Masco and Fortune Brands continue to see strong numbers, but Tim believes that these companies have already run their course.
So will things continue to go well for the home improvement industry? Tim thinks so, thanks to more 20-somethings moving out of their parents' homes after suffering through a weak economy, and as remodeling spending continues to rise. Tim also thinks investors should keep an eye on other indicators of a stronger home improvement industry, including Williams-Sonoma's earnings next week.
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The article The Home Improvement Industry Keeps On Improving originally appeared on Fool.com.Mark Reeth has no position in any stocks mentioned. Tim Hanson has no position in any stocks mentioned. The Motley Fool recommends Home Depot and Williams-Sonoma. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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