Home Depot reported Tuesday its third-quarter revenue increased about 6% to almost $38.9 billion, beating analyst expectations, because the retailer continued to beckon customers despite rising costs and macroeconomic pressures.
Each its skilled and do-it-yourself sales saw positive growth through the period, the retailer’s management said on a call with investors, adding professionals say their backlogs remain strong.
The corporate posted a profit of $4.3 billion, or $4.24 per diluted share, up from $4.1 billion, or $3.92 per share, from the identical quarter last yr.
Here’s what Home Depot reported Tuesday, compared with analyst expectations, based on a survey of analysts by Refinitiv:
- Earnings per share: $4.24, vs. $4.12 expected
- Revenue: $38.87 billion, vs. $37.96 billion expected
On Tuesday Home Depot reaffirmed its full-year guidance ahead of the important thing holiday quarter, noting it expects diluted earnings per share percentage growth within the mid-single digits. The corporate also expects comparable store sales to grow about 3% and an operating margin of roughly 15%.
A customer wearing a protective mask loads lumber onto a cart at a Home Depot store in Pleasanton, California, on Monday, Feb. 22, 2021.
David Paul Morris | Bloomberg | Getty Images
Investors have kept a watch on Home Depot’s performance and whether shoppers are still spending on renovations and do-it-yourself home improvements as they face persistent inflation.
“We’re navigating a singular environment,” Home Depot CEO Ted Decker said on Tuesday’s call with investors. “We will not predict how the macroeconomic backdrop will affect customers going forward.”
Despite this, he added the corporate believes demand will remain strong, especially as consumers proceed to remain home greater than usual. The standard Home Depot customer continues to be in a position to afford home improvement projects, he said.
Home Depot said Tuesday that while its customer transactions were down barely greater than 4%, its average ticket prices rose about 9% to $89.67. The corporate also said its sales per retail square foot rose 5%.
Chief Financial Officer Richard McPhail noted the corporate is being faced with an “inflationary environment not seen in 4 a long time,” along with managing supply chain issues and a world shift in monetary policy.
Company executives said the upper ticket prices were driven by inflation, in addition to increased demand for brand spanking new products, adding there’s been some deceleration in inflation in recent months, particularly in lumber.
Home Depot’s gross margin rate was all the way down to 34%, meeting analyst expectations. The decrease was likely as a result of transportation costs, unfavorable product mix shift and commodity costs, in line with a Raymond James analyst note.
— CNBC’s Robert Hum contributed to this report.
Correction: This text has been updated to reflect that Home Depot’s profit of $4.3 billion, or $4.24 per diluted share, was up from $4.1 billion, or $3.92 per share, from the identical quarter last yr.