A strong housing market and consumers’ continued interest in making home improvements helped drive Home Depot’s quarterly sales over $2 billion, the company announced Tuesday.
The company’s same-store sales rose by 6.1 percent in the third quarter, which was significantly higher than the 1.4 percent increase analysts had expected, according to Refinitiv IBES. Meanwhile, the company’s overall net sales rose by nearly 10 percent to $36.82 billion, which was higher than analysts’ estimates of $35.01 billion.
The company saw an increase in spending among professional contractors who are turning to Home Depot to upgrade their toolkits and source building materials as they work through their backlog of repair jobs and home improvement projects that were initially put on hold at the start of the COVID-19 pandemic.
The retailer is also seeing an evolution of its core customer base to include millennials, who have moved to suburban areas during the past 20 months. These new customers are continuing to pursue home improvement projects as rising home prices are making them feel confident.
“The results show that home spending is remaining strong even as we cycle the big COVID-related surge from a year ago,” D.A. Davidson analyst Michael Baker said.
Baker noted that the retailer’s profit margins are performing well despite tackling rising freight and logistics costs due to ongoing supply chain issues. This is because Home Depot has been investing heavily into minimizing shortages and has even looked to charter its own cargo ship to avoid delays.