Home Depot sales rise as US housing slump deters big projects

Home Depot's sales increased during the second quarter as customers focused on smaller home improvement projects amid a persisting U.S. housing slump. Total revenue climbed to $47.86 billion, surpassing Wall Street's expectations of $47.24 billion, according to a FactSet survey. Global sales at stores open for at least a year grew by 1.7%, while U.S. comparable store sales rose by 1.3%.

Chief Financial Officer Richard McPhail attributed the sales growth to broad-based demand as customers engaged in smaller projects. Customer transactions dropped by 1% in the quarter, but shoppers spent more per average receipt, at $92.50 compared to $90.01 a year earlier. Neil Saunders, managing director of GlobalData, noted that the number of bigger-ticket projects decreased by 2.1% over the prior year, a concern shared by many businesses relying on credit.

However, smaller projects saw a 1.5% increase over the previous year, marking a positive shift from previous declines.

McPhail expressed optimism about Home Depot's resilience, emphasizing the company's focus on aspects it can control despite ongoing consumer uncertainty and housing affordability issues. The U.S. housing market has been in a slump since 2022, with mortgage rates rising from historic lows, making homebuying more challenging. Existing home sales in July fell by 1.7% compared to June, with NAR reporting that home prices reached unprecedented levels that month.