by Calculated Risk on 5/22/2006 02:24:00 PM

Following Home Depot, Lowe's is reporting that Q2 might be "soft". From TheStreet.Com:

On a conference call, Lowe's management said May same-store sales were running at the low end of its guidance for 3% to 5% growth. After Lowe's larger competitor, Home Depot, also reported top-line softness for its first quarter, investors are worried that the nation's home-improvement chains, longtime beneficiaries of the U.S. housing boom, could feel pain if the situation deteriorates.

"This ties in with higher gas prices and is a more direct signal of at least weaker spending trends than others that pointed to similar trends last week," said Credit Suisse First Boston analyst Gary Balter in a research note. "In a nervous market where concerns over interest rates and the direction of the economy are leading stocks down, this will add fuel to the fire."

My guess is this "softness" is because of the slowing housing market, rather than higher gas prices. With less home equity extraction, I'd expect fewer home remodeling projects.