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U.S. customers battling sticky inflation and higher borrowing costs are investing in small-scale maintenance work and outdoor projects even as they shun spending on large remodels and renovation.
“While there was strength in categories associated with smaller projects, we did see continued pressure in certain big-ticket, discretionary categories,” Home Depot (NYSE:HD) CEO Ted Decker said in a statement.
Shares were last up in choppy premarket trading with the company announcing a new $15 billion share repurchase program and maintaining its annual forecasts.
Meanwhile, the U.S. housing market is showing some signs of stabilizing. New home sales jumped 12.2% in May to the highest level in nearly 1-1/2 years, while new home construction surged by the most in over three decades.
Customer transactions dropped 1.8% at Home Depot in the second quarter, but improved from a 4.8% fall in the first. Average ticket rose a modest 0.1%, the company said.
Comparable sales fell 2% in the quarter, the company said, compared with analysts’ average estimate of a 3.54% drop, according to Refinitiv IBES data.
Home improvement suppliers have also indicated demand from the so-called “Pro-customers” – including professional builders and contractors – was relatively strong, as they worked on project backlogs.
The company posted a profit of $4.65 per share in the three months ended July 30, beating estimates of $4.45.
