Home Depot posts record profit, revenue; holds on to prospects

Home Depot sees continued demand for goods related to home improvement projects, despite rising home prices and mortgage rates.

Despite record profits and sales, the Atlanta home improvement chain maintained its expectations for the year.

Revenue for the three months ended July 31 rose 6.5% to $43.79 billion, ahead of Wall Street’s $43.35 billion forecast, according to a study by Zacks Investment Research.

Sales in stores that have been open for at least a year, a key indicator of a retailer’s health, rose 5.8% and 5.4% in the US

While the number of customer transactions decreased by 3%, the amount shoppers spent 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 Home Depot’s average ticket is up 9.1% from the previous year,” Saunders wrote. “While inflation doesn’t explain all gains, it has flattered Home Depot’s numbers.”

Saunders believes it has been easier for Home Depot to pass on price increases to customers because the products on the store shelves are considered essential to making home improvements. And contractors can pass on higher prices to customers, he added.

Home Depot made $5.17 billion, or $5.05 per share, which was also ahead of its forecast of $4.95 per share. It also outperformed last year’s strong second quarter, when the company posted a profit of $4.81 billion.

According to CEO Ted Decker, profit and sales levels were unprecedented for Home Depot.

The company stuck to its 2022 forecast for earnings per share growth of mid-single digits and total revenue and comparable store sales growth of approximately 3%.

READ ALSO -  3 children killed, 2 injured during Child Protective Services visit to Texas home

Home improvement stores have remained busy during the pandemic as people working from home took on new projects. Spring and summer is also a traditionally busy season as homeowners head out to buy flowers, vegetables and other garden and landscaping items.

Home Depot Inc. has continued to lure customers despite what could be a cooling of the housing market. Sales of previously occupied homes in the US slowed for the fifth consecutive month in June as higher mortgage rates and rising prices kept many home hunters on the sidelines. Existing home sales fell 5.4% in June from May to a seasonally adjusted annual figure of 5.12 million, the National Association of Realtors said last month.

Average long-term mortgage rates in the US rose last week in an ongoing volatile market, as the key 30-year bond yield jumped more than 5%. Mortgage buyer Freddie Mac reported that the 30-year yield rose from 4.99% a week earlier to 5.22%. In contrast, the percentage stood at 2.87% a year ago.

Copyright 2022 ABC NEWS. All rights reserved.
Follow WT LOCAL on Social Media for the Latest News and Updates.
Share this news on your Facebook,Twitter and Whatsapp.

Newsletter Updates

Enter your email address below to subscribe to our newsletter