Home Depot (HD) Q3 2021 earnings beat estimates

Home Depot (HD) Q3 2021 earnings beat estimates

Dwelling Depot on Tuesday reported third-quarter earnings and income that beat analysts’ forecasts as clients spent extra on house enchancment tasks. 

Sturdy demand is carrying over into the subsequent quarter because the retailer readies for the vacation season. Dwelling Depot executives advised analysts that same-store gross sales development for the primary two weeks of the fiscal fourth quarter are barely greater than third-quarter ranges.

The corporate’s shares rose greater than 4% in morning buying and selling, setting an all-time excessive for the inventory of $387.76 per share.

Here is what the house enchancment retailer reported in contrast with what Wall Road was anticipating, based mostly on a survey of analysts by Refinitiv:

  • Earnings per share: $3.92 vs. $3.40 anticipated
  • Income: $36.82 billion vs. $35.01 billion anticipated

Internet revenue 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 12 months earlier. Analysts surveyed by Refinitiv have been anticipating earnings per share of $3.40.

Internet gross sales rose 9.8% to $36.82 billion, topping expectations of $35.01 billion. Digital gross sales elevated by 8% within the quarter. Executives stated gross sales accelerated in October in contrast with August and September.

Dwelling Depot’s same-store gross sales climbed 6.1%, beating StreetAccount estimates of two.2%. The retailer confronted robust comparisons with a 12 months in the past, when its same-store gross sales have been hovering, due to shoppers taking over extra do-it-yourself tasks. Similar-store gross sales of things that price greater than $1,000 surged 18% within the third quarter.

On a two-year foundation, all of Dwelling Depot’s departments noticed same-store gross sales development. However its lumber and indoor backyard departments fell brief in contrast with a 12 months in the past. Dealing with comparability to same-store gross sales development of greater than 50%, lumber fell damaging this quarter. Indoor backyard same-store gross sales have been roughly flat.

A robust housing market has helped Dwelling Depot and rival Lowe’s. Shoppers have been investing extra as house costs climb, rising practically 20% in contrast with a 12 months in the past. Demand for supplies has been rising from house professionals, serving to to offset decrease demand from do-it-yourself tasks. Dwelling Depot holds a bigger share of the skilled market, though Lowe’s is attempting to win extra of that enterprise.

Dwelling Depot executives advised analysts that professionals are nonetheless working by means of backlogs of tasks as shoppers really feel snug having electricians, plumbers and contractors of their houses once more. The retailer additionally not too long ago relaunched its loyalty program for professionals, drawing extra visitors to its cellular app within the hopes of convincing them to buy at Dwelling Depot for all of their jobs.

This quarter, Dwelling Depot’s buyer transactions fell by 5.5% to 428.2 million. However shoppers have been spending extra once they did go to, elevating the common ticket by 12.9% to $82.38. Greater costs for copper and constructing supplies helped improve how a lot clients spent per go to, though lumber costs fell. Whilst prices rise, Dwelling Depot stated clients are buying and selling up for brand spanking new merchandise, citing its unique Behr Dynasty paint, which prices greater than $50 a gallon.

Gross sales per sq. foot elevated by 6.2% in quarter. In some shops, Dwelling Depot has been testing learn how to optimize area with out sacrificing the procuring expertise. After early success, the retailer plans to implement the technique in 400 areas subsequent 12 months.

The quarter’s gross sales additionally acquired a lift from Halloween. Executives stated they noticed document gross sales as clients snapped up unique merchandise. The corporate’s viral 12-foot skeleton returned this 12 months after promoting out the earlier 12 months.

Now the corporate is specializing in the vacation season within the fourth quarter. Just like final 12 months, Dwelling Depot will give attention to providing offers throughout an extended time interval as an alternative of simply Black Friday.

CEO Craig Menear advised analysts that the corporate has obtained most of its items slated for the fourth quarter. Nevertheless, roughly 95 ships outdoors the ports of Los Angeles and Lengthy Seaside, California are nonetheless ready to be unloaded. Executives stated that they weren’t very involved concerning the provide chain delays.

Read the full earnings release here.

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