Any notion that Home Depot’s hot streak would cool down now that the pandemic is easing was dismissed Tuesday when the home improvement chain reported a stellar set of quarterly financial results.
Home Depot said comparable sales at its U.S. stores rose 29.9% in the first quarter, building on a 25% increase in 2020 when housebound Americans became obsessed with home improvement projects like better offices and new roofs. Total sales hit $37.5 billion, up 32.7% from the same year, far better than analyst projections.
While some of the gains Home Depot saw suggest help from stimulus checks, the company’s finance chief Richard McPhail said the booming market will likely help the retailer to keep growing in the coming years. (The retailer did not provide a 2021 forecast because of uncertainty in the near term, he said.)
Last year, home values jumped 10%, McPhail said, predicting that would help Home Depot’s business for a long time.
“We know that as people’s home increase in value they are more willing to spend and invest in those homes,” McPhail told Fortune. “Over a multiyear period we expect to see the housing environment supportive of home improvement demand.”
And more millennials are becoming homeowners, he added, noting that members of that generation now represent about one-fifth of home-owning households in the U.S. And that under 40 cohort has the DIY bug he says. “As a rule when you are introduced to doing home improvement projects you are willing to take more on,” said McPhail.
Strong business has continued into May, he said, after a quarter of spending on big-ticket items and higher revenue from wood products helped by the price of lumber being four times last year’s levels at times.
“Everything I see points straight to continued strong demand for projects,” the CFO said.
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