Customers wearing protective masks wait to check out at a Home Depot store in Pleasanton, California, U.S., on Monday, Feb. 22, 2021.
David Paul Morris | Bloomberg | Getty Images
Home Depot on Tuesday beat analysts’ estimates for its fiscal second-quarter profit and sales as fewer customers visited its stores but those who did spent more per trip.
Here’s how the company did for its fiscal second quarter compared with what Wall Street was expecting, according to a survey of analysts by Refinitiv:
- Earnings per share: $4.53 vs. $4.44 expected
- Revenue: $41.12 billion vs. $40.79 billion expected
Home Depot’s net income for the three-month period ended Aug. 31 grew to $4.8 billion, or $4.53 per share, from $4.3 billion, or $4.02 per share, a year earlier. Analysts had been looking for $4.44 per share, according to a Refinitiv survey.
Revenue climbed 8.1% to $41.12 billion from $38.05 billion a year earlier. That topped expectations for $40.79 billion.
The company reported a 5.8% drop in customer transactions compared with a year earlier, but the average ticket was 11.3% larger. Sales per retail square foot grew 5.3% year over year to $663.05.
A strong housing market, with increasing home prices and low mortgage rates, has aided home improvement chains Home Depot and Lowe’s. But analysts are watching to see how long this trend continues, with the delta variant forming the latest headwind for retail businesses. Unease about the rising number of Covid-19 cases could curtail consumer spending.
Analysts say lumber price inflation peaked during Home Depot’s most-recent quarter, which should boost sales, but could weigh on profit margins.
The company faces tough comparisons with a year earlier, when its brick-and-mortar stores remained open during the pandemic, and many Americans invested in remodeling projects. Home Depot’s revenue growth is expected to slow in 2021.
The company hasn’t released an outlook yet for the fiscal year.
Home Depot and Lowe’s are vying for the business of home professionals, such as electricians — who typically place orders in bulk — in the coming quarters. Home Depot recently added to its pro business with the acquisition of HD Supply, a large distributor of appliances, plumbing and electrical equipment.
Home Depot shares are up about 26% year to date.
This story is developing. Please check back for updates.
