Home Depot sales continue to surge in hot housing market
Home Depot’s sales continued to climb through third quarter with the U.S. housing market red hot.
Revenue rose 9.8% to $36.82 billion, exceeding the $34.97 billion Wall Street had expected, according to a survey by Zacks Investment Research. Sales at stores open at least a year, a key gauge of a retailer’s health, jumped 6.1%, also better than expected. Those sales rose 5.5% in U.S. stores.
While the number of customer transactions slipped 5.5%, the average receipt rose 12.9% to $82.38.
Some of those bigger shopping trips involved people prepping their homes for the winter season, but also higher prices due to snarled supply chains and shortages as the U.S. economy emerges from the pandemic, said Neil Saunders, managing director of GlobalData.
“Part of the uplift can also be attributed to inflation which has pushed prices up across many categories, providing a healthy boost to sales,” Saunders said.
Shares jumped almost 4% at the opening bell Tuesday.
Home Depot Inc. earned $4.13 billion, or $3.92 per share, easily topping projections of $3.41, as well as last year’s quarterly profit of $3.4 billion.
Hardware stores have been a hub of activity during the pandemic as people working from home took on new projects. Many also moved into new homes with more space for a home office.
Sales of previously occupied U.S. homes bounced back in September to their strongest pace since January as mortgage rates tick higher, motivating buyers to get off the sidelines.
The National Association of Realtors said last month that existing homes sales rose 7% compared with August to a seasonally-adjusted annual rate of 6.29 million units.
In addition, sales of new homes jumped 14% in September to the fastest pace in six months as strong demand helped offset rising prices.
The Commerce Department reported last month that sales of new single-family homes rose to a seasonally adjusted annual rate of 800,000 units last month which was well above what economists had bee expecting.