Home Depot posts record profit, revenue; sticks to the point of view

FILE - The Home Depot logo signs its façade on Friday, May 14, 2021 in North Miami, Fla.  Home Depot sales rose in its fiscal second quarter, fueled by continued demand for items related to home improvement projects.  (AP Photo/Vilfredo Lee, FILE)

FILE – The Home Depot logo signs its façade on Friday, May 14, 2021 in North Miami, Fla. Home Depot sales rose in its fiscal second quarter, fueled by continued demand for items related to home improvement projects. (AP Photo/Vilfredo Lee, FILE)

AP

Home Depot is seeing a steady demand for items related to home improvement projects, despite rising prices and mortgage rates for homes.

Despite record gains and revenue, the Atlanta home improvement chain maintained its guidance for the year and shares were down 2.6% before the opening bell on Tuesday. Lowes, which posts quarterly earnings on Wednesday, dipped 2.5%.

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

Sales at stores open for at least one year, a key indicator of a retailer’s health, climbed 5.8% in the US and 5.4%

While the number of customer transactions fell 3%, the number of shoppers spending per transaction rose 9.1%.

The Atlanta company earned $5.17 billion, or $5.05 per share, which also topped per-share estimates for $4.95. This was even better than last year’s strong second quarter, when the company reported earnings of $4.81 billion.

According to CEO Ted Dekker, the level of profit and sales for Home Depot was unprecedented.

However, the company is sticking to its 2022 forecast for mid-single-digit earnings per share growth and total sales growth and comparable sales growth of about 3%.

Home improvement stores have been busy during the pandemic as people working from home have taken on new projects. Spring and summer are also a traditionally busy season as homeowners go outside for flowers, vegetables, and other gardening and landscaping items.

Home Depot Inc. continues to woo customers despite the coolness of the housing market. Sales of previously occupied US homes slowed for the fifth straight month in June as higher mortgage rates and rising prices put many home hunters on edge. The National Association of Realtors said last month that current home sales fell 5.4% in May to June at a seasonally adjusted annual rate of 5.12 million.

Average long-term US mortgage rates rose last week in a continuing volatile market as the key 30-year loan rate jumped back more than 5%. Mortgage buyer Freddie Mac reported that the 30-year rate rose to 5.22% from 4.99% a week ago. In contrast, the rate was 2.87% a year ago. 15-Year Average Rate, Fixed-Rate Mortgages, Popular Among Them

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