The Home Depot second-quarter profits and sales topped estimates even as fewer people shopped its stores.
Net income rose to $4.81 billion, or $4.53 per share, for the quarter ended Aug. 1, from $4.33 billion, or $4.02 per share, in the year-ago period. Analysts had been expecting $4.44 per share.
Revenue rose 8.1% to $41.12 billion, beating expectations for $40.79 billion. It was the first time in the home improvement retailer's history that quarterly sales surpassed $40 billion.
Comparable sales rose 4.5%, missing estimates. Comp U.S. sales were up 3.4%, the smallest increase in two years,
Customer transactions dropped 5.8% compared to a year ago. The average ticket, however, increased 11.3%. Sales per retail square foot grew 5.3% year-over-year to $663.05.
The retailer said kitchen and bath and lumber were its two strongest categories. Sales in paint, hardware, and indoor and outdoor garden were negative on a year-over-year basis.
The country’s robust housing market and pandemic-fueled boost in spending on home remodeling projects have driven strong sales at Home Depot and rival Lowe’s. While there are some signs that home improvement spending is starting to cool off as people return to pre-pandemic spending habits, Home Depot CFO Richard McPhail, on the company’s earnings call, that “customer engagement and demand for home improvement is healthy.”
“Housing remains strong, and we see a supportive environment for home improvement spending as we look out over the next several years,” he said.
Still, it’s worth noting that both the Home Depot and Lowe’s are making big plays for the home professional customer, whose sales outpaced those of the do-it-yourself customer for the second quarter in a row at the Home Depot.
The retailer did not a full-year outlook, citing uncertainty around the spreading COVID-19 delta variant.
At the end of the second quarter, the company operated a total of 2,298 Home Depot retail stores in all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico.