over 3 years ago • 2 mins
Walmart and Home Depot are a scrappy pair of US retail titans: they reported stronger-than-expected second-quarter results on Tuesday 💪
Analysts had been expecting Walmart’s sales in existing US stores to have risen 5.4% last quarter compared to the same time last year. But the company revealed sales were actually up 9.3%, helped by almost twice as much ecommerce revenue as home deliveries became “the new normal” 💻 That meant Walmart’s revenue and profit – up 80% on a year ago – was higher than predicted. And that, it said, was thanks to a spending boost from the government’s stimulus checks.
Home improvement retailer Home Depot might’ve appreciated them too, revealing much better-than-expected revenue and profit 💸 Sales in its existing stores were 23% higher than the same time last year – more than double the growth analysts had predicted. And it looks like all that time indoors gave homeowners expensive ideas: the average price of products they bought was up 10% from a year ago.
Walmart’s ramped up its same-day delivery options lately, but if food delivery services Instacart and Deliveroo have taught us anything, it’s that the move will probably lose the retailer money in the near term 🚚 That might be why it’s restarted plans to sell its UK grocery chain, Asda, in an effort to free up some extra cash.
Home Depot doesn’t lend itself to ecommerce like Walmart does: its customers, after all, are generally looking for particular things they need straight away. So investors tend to look at housing data in the US – where Home Depot makes 90% of its sales – for a sense of where the company’s earnings are headed next 🏡 And Tuesday’s fresh data was encouraging: homebuilding activity and building permits were higher last month than economists predicted, suggesting future demand for Home Depot’s products might be higher than investors think too.
Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.