The Home Depot has delivered a solid sales uplift for the second fiscal quarter, which provided promising signs after a period of stagnant growth, according to an analyst.
The company’s sales for the quarter ended August 2 rose 5.7 per cent year-on-year to $47.9 billion.
Comparable sales increased 1.7 per cent. While not exceptional, GlobalData MD Neil Saunders said this is the best comparable growth rate since the third quarter of 2022.
“After such a long period of languishing in the doldrums of low growth, this represents real progress in the trajectory of the business – and especially so as it comes off the back of a modest 1 per cent uplift in the prior year,” he said.
According to the analyst, a better housing market over the period supported growth by creating additional demand in the consumer segment, along with a small uplift in the number of domestic jobs undertaken by tradespeople.
“The number of smaller projects undertaken during the quarter increased by 1.5 per cent over the prior year. This may sound unimpressive, but it represents a step change from the declines of previous periods.
“The number of bigger-ticket projects undertaken remains down, falling by 2.1 per cent over last year. Concerns around financing and a previous lack of moving activity both remain major drags on the bigger-ticket segment,” Saunders said.
The pro-space remains Home Depot’s biggest strength, he added. “It makes sense as the upside for the business is substantially larger than in the consumer segment, where Home Depot already dominates and will struggle to eke out further gains,” he said.
On the bottom line, net earnings improved from $4.6 billion last year to $4.8 billion.
The company reaffirms its full-year guidance, expecting total sales to grow 2.5-4.5 per cent and comparable sales to be flat to up 2 per cent.
In a separate announcement, Home Depot said it has started the nationwide rollout of its express delivery service, offering rapid fulfillment for a small flat fee, with no subscription or membership required.
The service leverages over 2000 stores as neighborhood fulfillment hubs, delivering trade-grade products and everyday DIY essentials in three hours or less, according to the company.
