Home Depot beat Wall Street estimates for second-quarter sales and profit on Tuesday, as resilient demand for smaller repair-and-maintenance projects helped offset a sluggish U.S. housing market.
The world’s largest home-improvement retailer said sales increased 5.7 per cent to US$47.86 billion in the three months ended August 2, topping analysts’ expectations of US$47.27 billion, according to data compiled by LSEG.
Stubbornly high interest rates have pushed homeowners toward small-scale repair and maintenance projects such as painting and yard work, boosting demand at Home Depot.
The prolonged slump in the U.S. housing market has been the biggest drag on the home-improvement industry. Hopes for a recovery this year have been dampened as affordability concerns keep away prospective buyers.
Home Depot offers products across a broad price spectrum, from roughly US$5 to upwards of US$5,000, with an average basket size of about US$90.
The company’s shares rose about 1 per cent in choppy premarket trading.
Home Depot stuck to its annual sales and profit forecasts, and said it expects tariff refunds to counter the impact of higher-than-expected fuel and other input costs during the year.
On an adjusted basis, the company reported quarterly earnings per share of US$4.92. Analysts expected a per-share profit of US$4.73.
Home Depot expects annual comparable sales of about flat to up 2 per cent, and adjusted earnings per share of about flat to up 4 per cent.
The company kicks off earnings reports from big-ticket retailers that could shed light on the health of the U.S. consumer, as the war with Iran intensifies cost-of-living concerns. Closest rival Lowe’s and Target report on Wednesday, followed by Walmart a day later.
Last week, Home Depot said CEO Ted Decker, 63, will take a temporary medical leave of absence, with Chief Financial Officer Richard McPhail and Senior Executive Vice President Ann-Marie Campbell overseeing his duties.
Decker, whose condition was not disclosed, is expected to return within the next few months and will not join the post-earnings call, a spokesperson confirmed to Reuters.
(Reporting by Angela Christy in Bengaluru; Editing by Sriraj Kalluvila)
