While many home-seekers in the U.S. feel the sting of rising prices and stiff competition, Home Depot is benefiting from it all.
I know what you’re thinking:
“An article about Home Depot (NYSE: HD) on a Wednesday morning? That’s just too much excitement.”
Well strap in folks, we’re about to get a whole lot crazier!
The house hunter’s turmoil is Home Depot’s gain!
If you’re a Home Depot investor, and you’re not an orange-apron-clad Home Depot employee that has been forced to answer the most tedious of home improvement questions on an hourly basis, then you’ll be pretty happy right now.
The retailer reported fiscal first-quarter net income of $4.15 billion, or $3.86 per share, up from $2.25 billion, or $2.08 per share, a year earlier. Net sales rose 32.7% to $37.5 billion, beating expectations of $34.96 billion. Global same-store sales surged 31% for the quarter, and online sales grew by 27%.
Those are some serious numbers, and they have one unfortunate factor to thank more than anything else:
“The current shortage of new housing clearly is helping to drive improvements in the home values, which is a good thing for spending in the home,” CEO Craig Menear said on the conference call.
Despite rising lumber costs dampening sales of newly-built homes in recent months, people are still buying. What’s more, even the folks who aren’t buying or selling are improving their homes. After more than a year in lockdown, many homeowners have accrued savings that they otherwise may not have had, perhaps due to not vacationing or dining out. This has led to more home projects, and thus, more Home Depot shopping.
Perhaps the housing market isn’t great for everyone, but boom or bust, it appears that Home Depot stands to benefit.
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