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Home Depot expects a smaller decline in annual store sales following better-than-expected performance over the past three months, which was partly driven by hurricane recovery efforts.
“As weather normalized, we saw better engagement across seasonal goods and certain outdoor projects as well as incremental sales related to hurricane demand,” CEO Ted Decker said in the company’s earnings release Tuesday.
Decker told analysts Tuesday that the company’s third-quarter performance exceeded expectations despite “macroeconomic uncertainty.”
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Shares of the company rose during trading Tuesday following the better-than-expected results.
Joe Feldman, Telsey Advisory Group senior managing director, said in a Tuesday note that the “warmer and dryer weather” extended demand for summer categories like paint and outdoor grills and recovery efforts following Hurricanes Helene and Milton boosted sales of generators, batteries, plywood and building materials.
In an aerial view, a sign is seen posted on the exterior of a Home Depot store on Feb. 21, 2023 in El Cerrito, California. (Justin Sullivan/Getty Images / Getty Images)
Revenue jumped to $40.22 billion for the quarter, surpassing analysts’ expectations of $39.31 billion.
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Sales at stores open for at least a year decreased 1.3%, marking its eighth straight quarter of declines. This is down, though, from analysts’ average estimate of a 3.25% drop.
Workers, community members and business owners clean up debris in the aftermath of Hurricane Helene in Marshall, North Carolina, on Monday, Sept. 30, 2024. (Jabin Botsford/The Washington Post via Getty Images / Getty Images)
Store sales within the U.S. saw a 1.2% decline.
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The company now expects comparable sales to fall 2.5% for fiscal year 2024, down from its prior expected drop between 3% to 4%.
Home Depot, like its rivals, has been negatively impacted by housing market conditions, which prevented consumers from making any major remodels or moving.
Decker told analysts Tuesday that there is still “pressure on larger remodeling projects driven by the higher interest rate environment and continued macroeconomic uncertainty.”
However, Feldman believes the business has “upside from here on out,” saying the Federal Reserve’s interest rate cuts “should spur demand in the industry down the line.”
Reuters contributed to this report.
