Lowe’s Cos. shares fell about 3% Tuesday, after the home-improvement retailer missed revenue forecasts for the third quarter and lowered its guidance, warning that consumers favor experiences over goods for now.
The company’s bonds also saw net selling on the news, although they have held up well over the past two weeks.
As the following chart from data solutions provider BondCliQ Media Services shows, Lowe’s has a considerable amount of debt that will mature in the next few years, starting with about $2.5 billion in 2025.
Outstanding Lowe’s Home Improvement debt (USD) by maturity year. Source: BondCliQ Media Services
The bonds have seen net buying over the last few weeks.
Most active Lowe’s Home Improvement issues with next customer flow (last 10 days). Source: BondCliQ Media Services
On Tuesday, there was net selling of the bonds.
Lowe’s Home Improvement bonds new customer flow (Intraday). Source: BondCliQ Media Services
Spreads, meanwhile, have been tightening and were holding their gains on Tuesday.
Two-week spread performance for select Lowe’s Home Improvement bonds. Source: BondCliQ Media Services
Lowe’s earnings reflected the same concerns reported by rival Home Depot last week with its chief executive noting “pressure in certain big-ticket, discretionary categories” when speaking on the company’s earnings call.
Lowe’s stock
LOW,
has fallen 0.4% in the year to date, underperforming the S&P 500
SPX
which has gained 18%.
Read the full article here