Retailer Home Depot (NYSE:HD) handily beat analysts’ estimates for its fiscal second-quarter profit and sales.
However, the Atlanta, Georgia-based company said fewer customers visited its stores in the April to June period, but those who did frequent its outlets spent more money per trip. Shares of Home Depot fell 4% in premarket trading as the company didn’t provide any forward guidance.
Home Depot’s same-store sales came in slightly below Wall Street estimates as the company lapped a period a year earlier when customers flocked to its stores to buy paint, wood, gardening supplies and other materials for home remodeling projects.
Home Depot’s earnings per share (EPS) came in at $4.53 U.S. a share compared to $4.44 U.S. that was expected. Home Depot’s revenue totaled $41.12 billion U.S. versus $40.79 billion U.S. that Wall Street had expected.
Same-store sales rose 4.5%, below the 5% growth anticipated from Wall Street analysts polled by Refinitiv. The company reported a 5.8% drop in customer transactions compared with a year earlier, but the average purchase was 11.3% larger. Sales per retail square foot grew 5.3% year-over-year to $663.05 U.S.
A strong housing market, with increasing home prices and low mortgage rates, has aided home improvement chains such as Home Depot and Lowe’s (NYSE:LOW). But analysts are watching to see how long this trend continues, with COVID-19 variants forming the latest headwind for retail businesses.
Year-to-date, Home Depot shares are up about 26%.
