Dwelling Depot (HD) Q3 2021 earnings beat estimates

Dwelling Depot reported third-quarter earnings and income on Tuesday that beat analysts’ forecasts as clients spent extra on house enchancment initiatives.

Sturdy demand is heading into the following quarter because the retailer gears up for the vacation season. Dwelling Depot executives informed analysts that same-store gross sales development for the primary two weeks of the fiscal fourth quarter is barely above third-quarter ranges.

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Shares of the corporate rose greater than 4% in morning buying and selling, hitting an all-time excessive for the inventory at $387.76 per share.

This is what the house enchancment retailer stated in comparison with what Wall Avenue anticipated, primarily based on a survey of analysts by Refinitiv:

  • Earnings Per Share: $3.92 versus $3.40 anticipated
  • Income: $36.82 billion versus $35.01 billion anticipated

Web earnings for the fiscal third quarter ended October 31 rose to $4.13 billion, or $3.92 per share, from $3.43 billion, or $3.18 per share, a 12 months in the past. Analysts polled by Refinitiv have been anticipating earnings of $3.40 per share.

product sales rose 9.8% to $36.82 billion, topping expectations of $35.01 billion. Digital gross sales grew 8% within the quarter. Officers stated gross sales picked up in October as in comparison with August and September.

Dwelling Depot’s same-store gross sales climbed 6.1%, beating StreetAccount’s estimate of two.2%. The retailer confronted robust comparisons from a 12 months in the past, when its same-store gross sales have been on the rise, because of shoppers taking over extra do-it-yourself initiatives. Similar-store gross sales for objects costing greater than $1,000 elevated 18% within the third quarter.

On a two-year foundation, all of Dwelling Depot’s departments noticed same-store gross sales development. However its timber and indoor backyard departments fell wanting what it was a 12 months in the past. Wooden fell damaging within the quarter, in comparison with same-store gross sales development of greater than 50%. Indoor backyard same-store gross sales have been practically flat.

A powerful housing market has helped Dwelling Depot and rival Lowe’s. Shoppers are investing extra as house costs are rising by about 20% in comparison with a 12 months in the past. There’s growing demand for supplies from house professionals, serving to to offset decrease demand from do-it-yourself initiatives. Dwelling Depot holds a big share of the skilled market, although Lowe’s is attempting to beat extra of that enterprise.

Dwelling Depot officers informed analysts that professionals are nonetheless working by means of a backlog of initiatives as shoppers really feel snug re-hiring electricians, plumbers and contractors of their houses. The retailer not too long ago revamped its loyalty program for professionals, convincing them to buy all of their jobs at Dwelling Depot in hopes of attracting extra visitors to its cellular app.

Within the quarter, Dwelling Depot buyer transactions fell 5.5% to 428.2 million. However shoppers have been spending extra after they traveled, growing the common ticket by 12.9% to $82.38. Larger costs for copper and constructing supplies helped clients decrease their spending per go to, though lumber costs fell. Regardless of rising prices, Dwelling Depot stated clients are buying and selling in for the brand new merchandise, citing its particular Behr Dynasty paint, which prices greater than $50 a gallon.

Gross sales per sq. foot elevated 6.2% within the quarter. In some shops, Dwelling Depot is testing optimizing location with out sacrificing the purchasing expertise. After preliminary success, the retailer plans to roll out the technique to 400 areas subsequent 12 months.

The quarter’s gross sales additionally picked up from Halloween. Executives stated they noticed document gross sales as clients purchased specialty merchandise. The corporate’s viral 12-foot skeleton is again this 12 months after being offered out final 12 months.

Now the corporate is specializing in the vacation season within the fourth quarter. Like final 12 months, Dwelling Depot will give attention to providing longer-term offers somewhat than simply Black Friday.

CEO Craig Menear informed analysts that the corporate obtained most of its stuff for the fourth quarter. Nevertheless, about 95 ships are nonetheless ready to be unloaded exterior the ports of Los Angeles and Lengthy Seashore, Calif. Executives stated they weren’t too involved about provide chain delays.

Learn the total earnings launch right here.

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