The Home Depot’s third-quarter sales rose 5.6% to $38.87 billion.
The Home Depot extended its winning streak in the third quarter, beating analysts estimates for top- and bottom-line growth and comparable sales amid rising costs.
The retailer is entering the holiday season on the heels of three strong quarter. In the second quarter, it delivered the highest quarterly sales and earnings in its history,
The company reported profit of $4.3 billion, or $4.24 per diluted share, in the quarter ended Oct. 30, compared to $4.1 billion, or $3.92 billion, in the year-ago quarter. Analysts had expected earnings per share of $4.12.
Revenue rose 5.6% to $38.87 billion, beating analyst expectations for $37.95 billion. Comparable sales increased 4.3%, and comparable sales in the U.S. increased 4.5%.
“We delivered another solid performance in the third quarter, driven by strength in project-related categories across the business," said Ted Decker, chair, president and CEO.
Similar to many retailers, the Home Depot felt the sting of rising costs during the quarter as cost of sales increased more than total sales, rising 5.7% to $23.65 billion. Gross margin contracted to 34.0% from 34.1%. Merchandise inventories of $25.72 billion inched down the end of July, but up 25.0% from a year ago
The retailer reaffirmed its full-year guidance, saying it expects diluted earnings per share percentage growth in the mid-single digits. Comparable store sales are forecast to grow about 3% and an operating margin of approximately 15%.
At the end of the third quarter, the company operated a total of 2,319 retail stores in all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico.