Home Depot’s Q3 results top Wall Street as pullback in customer spending eases a bit

Home Depot continued to deal with a pullback in spending from customers in its budgetary third quarter, but it was less severe than in the history, and its act beat Wall Street’s expectations. The home advancement retailer also boosted its packed-year turnover outlook.

turnover for the Atlanta-based corporation improved 6.6% to $40.22 billion in the quarter. That topped the $39.31 billion that analysts surveyed by FactSet predicted.

Sales at stores open at least a year, a key gauge of a retailer’s health, slipped 1.3%. In the U.S., the figure fell 1.2%. Still, that’s a marked advancement from the second quarter, when sales at stores open at least a year declined 3.3% and dropped 3.6% in the U.S.

Neil Saunders, managing director of GlobalData, was encouraged by some of the data.

“Home Depot is still experiencing a modest turnover decline of 1.2% in its U.S. business. While this comes off the back of a decline in the prior year, it is the shallowest rate of reduce in two years and sends a positive signal that Home Depot may finally be reaching the bottom of its long sales slump and will soon pivot its core business back into growth,” he said in an emailed statement.

Third-quarter customer transactions were nearly flat when compared with the prior-year period, while the amount shoppers spent declined slightly to $88.65 per average ticket from $89.36 a year earlier.

Home advancement retailers like Home Depot have been dealing with homeowners putting off bigger projects due to higher rates and lingering concerns about expense boost.

While mortgage rates have started to ease recently, the U.S. housing trade has been in a sales slump dating back to 2022, when mortgage rates began to climb from pandemic-era lows.

Last month the National Association of Realtors reported that existing home sales fell 1% in September, from August, to a seasonally adjusted annual rate of 3.84 million. That marked the second straight monthly decline and the slowest annual sales pace since October 2010 when the housing trade was still in a deep slump following the late-2000s real estate crash.

Home Depot Inc. earned $3.65 billion, or $3.67 per distribute, for the period ending Oct. 27. A year earlier, it earned $3.81 billion, or $3.81 per diluted distribute.

Stripping out sure items, returns were $3.78 per distribute. Wall Street was calling for $3.65 per distribute.

“While macroeconomic uncertainty remains, our third-quarter act exceeded our expectations,” Ted Decker, chair, president and CEO, said in a statement on Tuesday. “As weather normalized, we saw better engagement across seasonal goods and sure outdoor projects as well as incremental sales related to hurricane demand.”

Home Depot now anticipates packed-year turnover to rise about 4%. Its prior outlook was for turnover to be up 2.5% to 3.5%. The chain now foresees sales at stores open at least a year to be down about 2.5%. It previously approximate packed-year sales at stores open at least a year would drop between 3% and 4%

In addition, Home Depot predicts returns per distribute will fall about 2% and adjusted returns per distribute will decline approximately 1%. Its prior guidance was for returns per distribute to fall between 2% and 4%.

In premarket buying and selling, Home Depot shares rose 2.5%.