What's going on?

Lowe�s isn�t your garden variety retailer, you know: the DIY giant announced stronger-than-expected quarterly earnings on Wednesday.

What does this mean?

With homeowners spending more time at home than ever last year, there was a leap in demand for tools and timber to spruce up home and garden alike. That much was clear from Lowe�s update: sales in existing stores were up by a higher-than-expected 28% from the same time last year, and the company�s quarterly profit beat analysts� forecasts.

Lowe�s did strike a cautious note about the year ahead, saying it thinks the overall home improvement market will shrink as life goes back to normal. But the retailer still reckons it�ll gain market share and improve its profit margin no matter what. That�s in stark contrast to nemesis Home Depot, which refused to make a forecast altogether � suggesting it might not have what it takes to catch up with its rival.

Why should I care?

For markets: Here�s the slowdown they warned you about.

Lowe�s fortunes are closely tied to the housing market, and there wasn�t good news on that front on Wednesday. New data showed US mortgage applications were down 11% last week compared to the week before, while 30-year mortgage rates hit their highest since September. According to some analysts, the apparent drop in house-buying is down to the recent disruptions in Texas and should be short-lived. But Lowe�s investors weren�t willing to bet on it: they sent the company�s stock down 3%.

The bigger picture: Some retailers will come out of this stronger than others.

Wednesday was a tough day for other retailers too: mattress company Casper Sleep�s stock dropped 8% after its disappointing earnings release, while Office Depot-parent ODP�s fell 5%. TJX was the outlier: the TJ Maxx owner missed earnings expectations but its stock rose � probably because investors think vaccinated shoppers are poised to return to its stores and give the company a much-needed boost.