Home Depot posts record profits and revenue; Sticks to Outlook
By MICHELLE CHAPMAN, AP Business Writer
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.
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%.
Neil Saunders, chief executive of GlobalData, said on Tuesday there was some inflation in the numbers.
“This is one of the reasons the Home Depot’s average ticket was up 9.1% over the prior year,” Saunders wrote. “While inflation doesn’t account for all of the gains, it did flatter Home Depot’s numbers.”
Saunders says it’s been easier for Home Depot to pass price increases on to customers because the products on its store shelves are seen as essential to making improvements in the home. And contractors can pass on higher prices to customers, he added.
Home Depot 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.
The company stuck to its 2022 guidance of single-digit earnings per share growth and total sales growth and comparable sales growth of about 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
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