Houzz survey says: homeowners playing for keeps
A new survey from Houzz reveals that homeowners are more keen on remodeling than moving these days, and not always for purely financial reasons.
“The investment that people make in their homes is not only a financial one, it’s also a very emotional one,” said Liza Hausman, vice president of Community for Houzz. “Rather than opting to move, the majority of Houzz homeowners undertaking renovation projects are choosing to do so because they want to stay in their home, not because they can’t afford to move. Significantly more homeowners on Houzz are able to fund their remodeling projects this year compared with last year, and we see them investing to create a home that meets their needs now and for the long-term.”
According to the findings, 66% of U.S. homeowners who are currently in the midst of remodeling plan to stay in their homes for the forseeable future. 53% are buffing up their home to increase resale value, but are planning to stay put for at least the next five years. Only 16% plan to sell in the next two.
Admittedly, some of this is due to cautious optimism surrounding the economy. A good chunk — 74% — said their local housing market has improved, and fewer are having trouble staying in budget (19% versus 27% in 2013).
However, those reporting significant improvements in the market were more than twice as likely to remodel (42%) than move (16%) in the next two years. A prevailing cause is wanting to move, but deciding remodeling makes more economic sense, and many feel prices are rising too fast to move just yet. High home prices, especially in expensive California markets, are also prohibitive to many would-be buyers.
With eyes on the younger demographic, Houzz found that millennial homeowners are the most likely of the age groups to aspire to move in the next five years. At 36%, they also lead the pack in those remodling to increase home value in preparation for an upcoming move.
Among other findings, bathrooms and kitchens remain the renovation hot-spots, with bathrooms being the more popular undertaking but kitchens receiving the highest share of dollars.
Additionally, paint (45%) was the most likeliest purchase to be made in the next six months, followed by accessories (36%), lighting (35%) and interior furniture (31%).
The findings come from the third annual Houzz & Home survey, which polled over 135,000 U.S. residents and 190,000 total respondents throughout the world.
At hhgregg, CEO addresses headwinds
Dennis May, president and CEO of Indianapolis-based appliance and home products retailer hhgregg, said he remains excited about the current fiscal year, despite the company’s $7.2 million net loss for the three months ended March 21.
“As we discussed in our prerelease, we faced a number of headwinds during the quarter, which led to disappointing financial results. In addition to continued volatility in the consumer electronics business, extreme weather in January, February and the beginning of March negatively impacted traffic and operating performance in the majority of our stores, particularly those located in the Midwest and Mid-Atlantic regions, where the weather was the most severe,” May said. “Despite these challenges, the company was able to report a comparable sales increase in its appliance category, which marked its 11th consecutive quarter of comparable-store sales increases in the appliance category."
Net sales for the three- and 12-month periods decreased 9.9% and 5.5%, respectively, to $538.3 million and $2.3 billion, as compared with the same periods in the prior year.
"Despite the challenges of last year, we are excited about the current fiscal year and our opportunity to transform our business through a number of strategic initiatives. During the fiscal year, we will focus on redefining our sales mix, enhancing and differentiating our customer experience, expanding our e-commerce capabilities and launching new customer facing technologies. We believe our responsibility is to inspire and delight our customers with a truly differentiated purchase experience to help bring their homes to life. In doing so, we will improve our financial and operating results, and will solidify our brand relevance within the marketplace.”
At Lowe’s, earnings outpace sales
Bad weather for retail dampened sales at Lowe’s, but earnings surged well into the double digits for the first quarter, the company announced Wednesday morning.
Lowe’s sales increased 2.4% in the first quarter, rising to $13.4 billion. Comparable-store sales increased 0.9%.
The Mooresville, North Carolina-based retail giant reported a net earnings surge of 15.6% to $624 million for the quarter ended May 2.
Lowe’s quarterly earnings report followed by one day the report from Home Depot, which outperformed Lowe’s in terms of sales. Lowe’s showed the higher percentage gain in net earnings — 15.6%, compared with Depot’s 12.5%.
Both retail giants pointed to the challenges of operating through a season hampered by a late start to spring.
"We executed well during the quarter, despite an unexpectedly prolonged winter in many areas of the country," commented Robert A. Niblock, Lowe’s chairman, president and CEO. "While poor weather dampened traffic and negatively impacted performance of exterior categories, results for indoor categories were solid. We effectively aligned inventory, staffing and marketing resources by climatic zone to best serve customers’ needs."
As of May 2, 2014, Lowe’s operated 1,836 home improvement and hardware stores in the United States, Canada and Mexico, representing 200.7 million sq. ft. of retail selling space.
For the full fiscal year, Lowe’s said total sales are expected to increase approximately 5%, while comp-store sales are expected to increase about 4%.
Early second-quarter performance suggests Lowe’s is on the right path, Niblock said.
"Performance has improved in May, which — together with our strengthening execution — gives us the confidence to reaffirm our sales and operating profit outlook for the year," he said.