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Home Depot (HD) Q2 2022 earnings

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A customer wearing a protective mask loads lumber at a Home Depot store in Pleasanton, California, Feb. 22, 2021.

David Paul Morris | Bloomberg | Getty Images

Home Depot on Tuesday reported higher second-quarter earnings and revenue that beat analysts’ expectations as the corporate cited continued strength in demand for home improvement projects.

The Atlanta-based company stood by its forecast for total and comparable sales to grow about 3% for the yr, with comparable sales to be slower within the second half of the yr. Its shares were up about 2% in morning trading.

Same store sales rose 5.8% within the quarter, topping analyst expectations for growth of 4.9%, in response to FactSet. Home Depot said transactions slipped throughout the period, while the typical ticket rose, primarily consequently of inflation.

“Our team has done a incredible job serving our customers, while continuing to navigate a difficult and dynamic environment,” Home Depot CEO and President Ted Decker said in an announcement.

Here’s what the Atlanta-based company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: $5.05 vs. $4.94 expected
  • Revenue: $43.79 billion vs. $43.36 billion expected

In an earnings call, executives said that project backlogs were still healthy despite the weaker housing market and that customers weren’t yet trading right down to cheaper items despite inflation.

Through the pandemic, many individuals spruced up their living spaces as they spent more time hunkered down at home. Investors have been watching to see whether individuals are still prioritizing such projects in a tightening macroeconomic environment.

For the three-month period ended July 31, total customer transactions slipped to 467.4 million, from 481.7 million a yr ago, while average ticket grew 9% to $90.02 from $82.48. Skilled contractors are inclined to make fewer visits and buy in higher quantities.

“Through the second quarter, each pro and DIY sales growth was positive, with pro outpacing DIY,” noted Jeff Kinnaird, the chief vice chairman of merchandising, throughout the earnings call.

Sales per retail square foot grew 5.7% in comparison with the identical quarter last yr.

Net income for the quarter rose to $5.17 billion, up 7.6% from the prior yr. Net sales grew 6.5% from a yr ago, which the corporate said marked its highest-ever quarterly sales.

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