Home Depot posts record profits and revenue; sticks to the outlook
The Home Depot is seeing continued demand for goods tied to home improvement projects despite soaring prices and mortgage rates for homes.
Despite record profits and revenue, the Atlanta home improvement chain stuck to its forecast for the year and shares fell 2.6% before the opening bell on Tuesday. Lowe’s, which publishes its quarterly results on Wednesday, fell 2.5%.
Revenue for the three months ended July 31 rose 6.5% to $43.79 billion, beating Wall Street’s forecast of $43.35 billion, according to a Zacks Investment Research survey.
Sales at stores open for at least a year, a key indicator of a retailer’s health, climbed 5.8% and 5.4% in the United States.
While the number of customer transactions fell by 3%, the amount spent by buyers per transaction increased by 9.1%.
The Atlanta-based company earned $5.17 billion, or $5.05 per share, which also beat projections of $4.95 per share. It was also better than last year’s strong second quarter, when the company posted a profit of $4.81 billion.
Profit and sales levels were unprecedented for Home Depot, according to CEO Ted Decker.
However, the company is sticking to its 2022 guidance of mid-single-digit earnings per share growth and total sales growth and comparable sales growth of around 3%.
Home improvement stores have remained busy during the pandemic as people working from home take on new projects. Spring and summer are also a traditionally busy season, as homeowners head for flowers, vegetables, and other gardening and landscaping products.
Home Depot Inc. continued to attract customers despite what may be a cooling housing market. Sales of previously occupied U.S. homes slowed for the fifth straight month in June as rising mortgage rates and rising prices kept many home hunters on the sidelines. Sales of existing homes fell 5.4% in June from May to a seasonally adjusted annual rate of 5.12 million, the National Association of Realtors said last month.
Average long-term U.S. mortgage rates soared last week in a still-volatile market, with the key 30-year lending rate jumping more than 5%. Mortgage buyer Freddie Mac said the 30-year rate rose to 5.22% from 4.99% a week earlier. In contrast, the rate stood at 2.87% a year ago. The average rate for 15-year fixed-rate mortgages, popular among those