Home Depot signals a drop in home improvement projects as fewer customers visit its stores

home depot shelves empty
  • Home Depot saw its comparative sales drop considerably from 25% last year.
  • The company still saw a boost for its average ticket size and net earnings.
  • Home Depot CFO Richard McPhail said the company is up against "challenging compares."
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Home Depot wobbled in its latest earnings results, possibly signalling the end of the longstanding home improvement boom.

The home improvement giant comparative sales rose 3.4% in the US. Overall comparative sales grew by 4.5%. Neat earnings increased $4.8 billion, compared with $4.3 billion in 2020. But the company was always going to be up against stiff competition: Last year, comparative sales jumped a startling 25%. Home Depot had previously been posting stunning sales results, as bored consumers tackled home improvement projects during the pandemic.

Overall, fewer customers visited Home Depots this quarter, with the company experiencing a 5.8% drop in transactions compared with last year. That being said, the shoppers that stuck around spent more, with the average ticket size going from $74.12 to $82.48.

The company's shares fell 4% before the market opened on Tuesday as a result of the earnings.

"We're very pleased with the strong performance we saw in the second quarter, particularly as we lapped the unprecedented growth we saw this time last year," Home Depot's Chief Financial Officer Richard McPhail told analysts. "And while these challenging compares continue for the back half of the year, we are encouraged by what we are seeing."

CEO Craig Menear also touted the company's growing pro business, which has outperformed Home Depot's do-it-yourself performance for two consecutive quarters now.

"What we did see is that consumers are taking on larger projects, and have the tendency to hire a pro to do them," he said. "As a result, we've seen our pro business strengthen."

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