Home Depot Sales Streak Continues With Assist From Small Contractors
The Home Depot (HD) juggernaut keeps rolling.
Bouncing back from a relatively soft first quarter when a long winter delayed big home repair projects, Home Depot said on Tuesday that U.S. comparable sales rose 8% in the second quarter, trouncing forecasts for a 6.5% increase and proving that a maturing economic boom and cooling housing market aren’t slowing Home Depot.
While Home Depot has certainly ridden the housing market boom in recent years, the company has taken steps to make sure it can manage any inevitable slowdown. In December, Home Depot announced a near doubling of its capital expenditure to $11.1 billion over the following three years. Almost half of that is going to physical stores for things such as new, more contemporary signage, improved lighting in the paintbrush pods. Another feature: a tool that gives associates access to the sales history of a specific customer so he or she can suggest additional products or send a text when a new product comes in.
And Home Depot says these efforts are already paying off. Indeed, sales increased more than 10% in Home Depot’s pro contractor business and much more moderately with the do-it-yourself crowd. Most encouraging, sales to pros who spend less than $10,000 a year at Home Depot rose by a double-digit percentage, too, suggesting homeowners are not shying away from taking on big house projects.
“Part of the investing strategy we have underway is to lean into the customer experience be reinvesting in our stores, reinvesting in our supply chain, to set us apart form everybody else we compete with,” Home Depot Chief Financial Officer Carol Tomé told Fortune in an interview.
So good was business in the second quarter that Home Depot raised its fiscal year forecast and expects full-year sales to be up 7% and for profit to be $9.42 per share, up from its earlier projection for a 6.7% increase and a $9.31 profit. Despite that, shares were flat because of the impact of inflation in fuel lumber on Home Depot’s profits. At the same time, Tomé said all signs show to market conditions that will buoy Home Depot’s results for the foreseeable future.