Home Depot (NYSE: HD) reported better-than-expected earnings Tuesday. Nevertheless, shares fell 5% following the company’s statement that fewer customers had visited stores during the second quarter as Covid induced DIY projects slowed.
The home improvement retailer reported earnings of USD4.54 a share, compared to the expected USD4.44 per share. Revenue amounted to USD41.12 Billion, higher than analysts anticipated USD40.79 Billion.
“I am very proud of our associates, who continue to demonstrate a relentless focus on serving our customers,” Home Depot CEO Craig Menear said in the earnings release. “As a result of their efforts, we achieved a milestone of over $40 billion in quarterly sales for the first time in Company history.”
Home Depot chose not to provide a full-year forecast amid the ongoing concerns around the Covid pandemic and the new delta variant. Despite the strong quarterly profit and revenue results, same-store sales did not meet expectations.
According to Menear, although consumers are focused on pre-pandemic activities, there are still people invested in home improvement projects as well as bigger sized projects. Sales from professional customers did surpass those from DIY customers within the second quarter.
The company posted a 5.8% drop in customer transactions in comparison to the previous year, though the average ticket was 11.3% greater.
“Home improvement was a big Covid winner, and Home Depot performed masterfully through the crisis,” Oppenheimer Senior Analyst Brian Nagel told CNBC. “But I’ve got to believe that as the economy opens up, as people start to move around again, there’s going to be less of a focus on spending on the home. And that’s what we’re seeing in these numbers now.”
Home Depot shares have risen 26% throughout the year.