Home Depot reported a highly successful second quarter on Tuesday, leaving no doubt that despite stratospheric unemployment and uncertainty about when the COVID-19 pandemic will loosen its grip, there is at least one area where American shoppers are splurging: where they live. .
The home improvement chain said domestic same-store sales rose 25% in the quarter ending in early August, about double what Wall Street expected. The company’s total revenue was $ 38.1 billion in the quarter.
“Home is definitely the only place where people spend money,” Edward Jones analyst Brian Yarbrough tells Fortune.
Home Depot also took advantage of a resurgence in the contractor business, removing limitations stemming from the closure of COVID-19 in May. He observed that customers spend more per visit and come more often. What is encouraging for Home Depot is that this month’s business is similar to recent months, which, according to officials on the conference call, is despite the end of consumer incentive checks.
CEO Craig Menear said several factors explain why housing spending is proving so resilient.
“The home has never been more important to the client,” Menear said on an earnings call. There is additional attrition.”
Additionally, Home Depot benefited from the historically low mortgage rates that are stimulating the housing market and, by extension, the need for renovations. Rival chain Lowe’s will report its quarterly results Wednesday.
Despite spending $ 480 million in the quarter on incentives and efforts to clean stores more frequently, Home Depot’s bottom line also skyrocketed: Net revenue increased 24.5% to $ 4.33 billion, also ahead of forecasts of Wall Street.
