A Jefferies & Co. analyst expects business will improve in the second half for Home Depot Inc. and Lowe's Cos., but said Wednesday that the home improvement retailers will likely report slower sales for the second quarter when they post financial results next week.
Analyst Daniel Binder said the first quarter got a boost from warm weather that arrived early this year, and better commodity prices. Those benefits faded during the second quarter and consumers pulled back as well, he said.
"We are expecting the second-quarter to be soft as tailwinds that helped the first quarter dissipated in the second quarter and consumer confidence eroded around various world crisis events in May and June," Binder wrote.
Lowe's reports second-quarter results on Monday and Home Depot reports on Tuesday.
Binder kept his "Buy" rating on both stocks and said the second half of the year should be "less bumpy."
Home Depot's shares fell 28 cents to $27.96 during midday trading, while Lowe's shares fell 16 cents to $19.76. Binder believes the shares of both companies could rise 17 percent over the next year.
© Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.