Home Depot Inc (NYSE:HD) topped analysts’ expectations after the release of its third-quarter earnings report by accruing revenue of $36.82 billion against a $35.01 billion forecast. Growth was mainly driven by the increase in home improvement expenditure by consumers.
As reported by CNBC, Home Depot’s same-store sales jumped 6.1% in the quarter, beating StreetAccount estimates of 2.2%, while consumers’ average purchase increased by 12.9% to $82.38.
“Net income for the fiscal third quarter ended Oct. 31 rose to $4.13 billion, or $3.92 per share, from $3.43 billion, or $3.18 per share, a year earlier. Analysts surveyed by Refinitiv were expecting earnings per share of $3.40.”
According to the earnings report, net sales beat expectations of $35.01 billion by climbing 9.8% to $36.82 billion. The company’s positive results are driven by the strong housing market, which has also had a positive effect on other retailers.
“Consumers have been investing more as home prices climb, rising nearly 20% compared with a year ago. Demand for materials has been rising from home professionals, helping to offset lower demand from do-it-yourself projects,” CNBC reports.
“Home Depot holds a larger share of the professional market, although Lowe’s is trying to win more of that business.”
Lowe’s Upcoming Report
Rival Lowe’s Companies Inc (NYSE:LOW) is set to reveal third-quarter earnings Wednesday, with the Zack Consensus Estimate aiming at $21,8 billion in revenue, a drop of 2.1% from the same period last year.
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Earnings per share are expected to hit $2.32, as “The consensus mark suggests a rise of 17.2% from earnings of $1.98 reported in the year-ago quarter. The company delivered an earnings surprise of 6.5% in the last reported quarter,” according to Nasdaq.
As consumers have grown more interested in keeping their homes in good condition, industry experts believe that discretionary spending on home improvement is bound to spread into early next year –which has favored Pro and “do-it-yourself” segment sales.
Lowe’s has been investing heavily in the features of its online purchase channels, specifically product search and checkout, with the introduction of the Buy Online Pickup in Store touchless lockers.