Home Depot beat Wall Street second-quarter financial estimates, although consumers wary of discretionary spending in an uncertain economy took on smaller do-it-yourself projects while making fewer large remodeling commitments.
An analyst consensus estimate published by Yahoo Finance called for earnings per diluted share of $4.44 and revenues of $42.23 billion.
Comparable sales for the quarter slipped 2% year over year, and comps in the United States slipped 2% in the period, Home Depot reported. Overall sales were down by that same proportion, 2%, to $42.92 billion versus the year-before quarter. Operating income was $6.59 billion versus $7.21 billion in the year-previous period.
In a conference call, Billy Bastek, executive vice president, merchandising, stated six of Home Depot’s 14 merchandising departments posted positive comps, including building materials, outdoor garden, hardware, plumbing, tools and millwork. Comparable average ticket was slightly positive in the quarter even as comp transactions decreased 2%. With core commodities excluded, comp average ticket took a hit, primarily from inflation, across several product categories as well as demand for new and innovative products. Deflation from core commodity categories negatively impacted average ticket growth by 160 basis points driven by deflation in lumber. Year over year, comp transactions for big-ticket items such as patio furniture and appliances transactions, those over $1,000, slid 5.5%.
“We were pleased with our performance in the second quarter,” said Ted Decker, chair, president and CEO. “While there was strength in categories associated with smaller projects, we did see continued pressure in certain big-ticket, discretionary categories. We remain very positive on the medium-to-long term outlook for home improvement and our ability to grow share in a large and fragmented market.”
