What's going on?

The past few days have seen home improvement giants Home Depot and Lowe�s both report earnings � and their results were pretty good.

What does this mean?

While some retailers have struggled (like department stores), home improvement companies have experienced significant sales growth: Home Depot�s US sales rose almost 9% versus a year ago (Lowe�s rose 5.5%). One of the biggest reasons these retailers are doing well is because home prices keep going up. When your home goes up in value, you become more likely to �invest� in it by redoing the kitchen or replacing the roof.

Why should I care?

For the stocks: Home Depot always seems to do a bit better than Lowe�s. A good example is the growth in sales mentioned above (8.9% for Home Depot vs 5.5% for Lowe�s). Consequently, Home Depot�s stock is valued slightly higher (technically speaking, its stock price is worth more versus its underlying profits than Lowe�s stock price is). In general, though, their fortunes are pretty closely tied together by things like house prices, consumer spending and a possible new competitor�

The bigger picture: Amazon hasn�t penetrated the home improvement space (yet). �You can actually buy most DIY supplies from Amazon (even things like laminate and a kitchen sink), but people tend to use Lowe�s and Home Depot for projects. You can�t ask an Amazon sales rep for advice on how to redo your kitchen. However, Amazon is surely a risk: Amazon Home Services, which connects consumers with service professionals in their area, is expanding quickly. So you can buy that sink from Amazon and schedule a plumber to install it upon delivery. Look out Home Depot (and Lowe�s)!