Home Depot Nailed The Numbers Last Quarter

Home Depot Nailed The Numbers Last Quarter
Daniel Johnston

7 months ago2 mins

Mentioned in story

What’s going on here?

Home Depot had a surprisingly good quarter, with sales and profit hammering home that success.

What does this mean?

After nearly three years of soaring demand, Home Depot braced itself for a more challenging 2023, anticipating a return to pre-pandemic norms. But while there were some signs of strain, the situation wasn’t as dire as many predicted. Sure, the financial pinch has made folks hesitant about major renovations, and the big-ticket items that go along with that – but they’re still keen on smaller home projects, segments where Home Depot continues to shine. And professional contractors and builders, too, are keeping the registers ringing as they tackle their project backlogs. So even though the DIY behemoth recorded a 2% dip in sales compared to the same quarter last year, it outperformed both sales and profit forecasts.

Home Depot stock
Source: Google Finance

Why should I care?

Zooming in: Safe as houses.

Home Depot’s keeping its annual forecast pretty conservative, despite the beat. But when it comes to the long haul, it’s feeling bullish – pointing to the US housing shortage as a potential sales booster for years to come. In fact, the firm thinks it could be a decade before housing supply catches up with demand. And while the real estate market isn’t currently in the best shape, it could be on the up: recent data revealed that permits for housing construction surged to a twelve-month high in June. That uptick signals a wave of new homes in the pipeline – and as everyone knows, new homes make for plenty of trips to Home Depot.

The bigger picture: Living it large.

US consumers are really showing their resilience. Retail sales rose by 0.7% in July, easily beating expectations – and wages, which are finally outpacing inflation, probably helped. Combined with Home Depot’s beefy performance, this could be a sign of what to expect when Target and Walmart’s results are released later this week too.

US retail sales
Finimize

BECOME A SMARTER INVESTOR

All the daily investing news and insights you need in one subscription.

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.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

Finimize
© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG