Home Depot beats quarterly sales estimates as high interest rates boost repair demand

Home Depot HD-N beat Wall Street estimates for second-quarter sales on Tuesday, as resilient demand for smaller repair-and-maintenance projects helped offset a sluggish U.S. housing market.

The world’s largest home-improvement retailer posted sales of US$47.86-billion in the three months ended Aug. 2, topping analysts’ expectations of US$47.27-billion, according to data compiled by LSEG.

Home Depot has benefited as stubbornly high interest rates have pushed homeowners toward small-scale repair and maintenance projects such as painting and yard work.

The prolonged slump in the U.S. housing market has been the biggest drag on the home-improvement industry. Hopes for a recovery this year have been dampened as affordability concerns keep away prospective buyers.

The company stuck to its annual sales and profit forecasts, and said it expects tariff refunds to counter the impact of higher-than-expected fuel and other input costs during the year.

Home Depot expects annual comparable sales of about flat to up 2 per cent, and adjusted earnings per share of about flat to up 4 per cent.

Last week, the company said CEO Ted Decker, 63, will take a temporary medical leave of absence, with chief financial officer Richard McPhail and senior executive vice-president Ann-Marie Campbell overseeing his duties.

Decker, whose condition was not disclosed, is expected to return within the next few months and will not join the post-earnings call, a spokesperson confirmed to Reuters.

Home Depot offers products across a broad price spectrum, from roughly US$5 to upwards of US$5,000, with an average basket size of about $90.