Written by AP Business Writer Michelle Chapman
Though its performance fell short of Wall Street’s expectations, Home Depot’s sales increased during its fiscal second quarter as customers continued to concentrate on smaller projects in the face of cost and economic uncertainties.
Although revenue for the three months ending August 3 increased from $43.18 billion to $45.28 billion, it was still less than the $45.41 billion that FactSet’s poll of analysts had predicted.
One important measure of a retailer’s health, sales at stores that have been open for at least a year, increased by 1%. Comparable store sales rose 1.4% in the United States.
Tuesday morning trading saw a more than 4% increase in Home Depot’s stock price.
During the quarter, Home Depot observed customers focusing on gardening and smaller tasks, according to Neil Saunders, managing director of GlobalData.
Because of its excellent customer service, wide selection, and competitive pricing, Home Depot, the biggest improvement player, is receiving the majority of this increase and continues to be the top destination for customers, he added. It will benefit greatly from the latter point as consumers grow more cost-conscious.
During the quarter, there was a decrease of less than 1% in customer transactions. The average amount spent by consumers increased from $88.90 to $90.01 per receipt during the previous year.
In a statement, Chair and CEO Ted Decker said, “Our second quarter results were in line with our expectations.” Customers’ broader engagement in smaller home improvement projects during the first half of last year maintained the trend that started in the latter half.
Homeowners have been delaying larger projects due to rising borrowing prices and persistent inflation worries, which has affected home renovation stores like Home Depot.
Since 2022, when mortgage rates started to rise from pandemic-era lows, the U.S. housing market has been seeing a decline in sales.
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As rising prices and high mortgage rates deter homebuyers, sales of previously occupied properties have declined.
As mortgage rates remained high and the national median sales price rose to an all-time high of $435,300, sales of these homes in the United States fell in June to the slowest pace since last September.
Last year, home sales dropped to their lowest point in almost three decades.
For the second quarter, Home Depot made $4.55 billion, or $4.58 per share. The Atlanta-based business made $4.56 billion, or $4.60 per share, a year ago.
Earnings were $4.68 per share after excluding some things. Wall Street was hoping for $4.72 per share in earnings.
The business reiterated its estimate of 2.8% growth in total revenues for fiscal 2025. It still anticipates a 2% drop in adjusted earnings from $15.24 per share the previous year.
