Home Depot Surprises Investors, Posts Record Sales
The eyes of the home improvement industry were locked onto Home Depot’s second quarter earnings, as questions swirled in recent months over inflation, interest rates and the ability or willingness of home improvement customers to keep spending on their homes.
The Altanta-based retailer responded Tuesday morning with record-breaking sales and earnings for any quarter in its history. Plus, The Home Depot’s comp-store sales in the United States rose 5.4 percent, ahead of Wall Street projections.
"Our performance reflects continued strength in demand for home improvement projects,” said CEO Ted Decker, who also described the business environment as “challenging and dynamic.”
Even though the stores’ number of transactions declined on a comparable basis, sales increased 6.5 percent to $43.8 billion. Net earnings for the quarter were $5.2 billion, up 11.5 percent.
Home Depot also reaffirmed its guidance for fiscal 2022. That outlook includes total sales growth and comparable store sales growth of about 3.0 percent; and operating margin of approximately 15.4. percent.
At the end of the second quarter, the company operated 2,316 stores, no change from the first quarter.
Read the full earnings release here.
Domestic comps increased 5.4 percent.
More key metrics from the second quarter earnings report:
- Sales leveraging digital platforms increased 12 percent compared to the second quarter last year. The company reported record downloads, traffic and sales of its mobile app;
- Comp transactions decreased 3.1 percent;
- Comp average ticket increased 9 percent;
- Big ticket comp transactions (defined as more than $1,000) were up 11.6% compared to the second quarter of last year; and
- More than half of online orders were fulfilled through Home Depot stores.
“Despite near-term uncertainties, we believe that the long-term underpinnings of demand for home improvement, remains strong and that we are well positioned to leverage our distinct competitive advantages to capitalize on compelling growth opportunities in our space,” Decker said.