Home Depot (HD) Q3 2022 Earnings

Home deposit announced on Tuesday that its third-quarter revenue rose about 6% to nearly $38.9 billion, beating analysts’ expectations, as the retailer continued to attract customers despite rising prices. costs and macroeconomic pressures.

Its professional and DIY sales saw positive growth during the period, the retailer’s management said in a call with investors, adding that professionals say their backlog remains strong.

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Holiday shoppers are in no rush.  What this means for retail stocks

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The company posted earnings of $4.3 billion, or $4.24 per diluted share, compared with $4.1 billion, or $3.92 per share, in the same quarter last year.

Here’s what Home Depot reported on Tuesday, relative to analyst expectations, based on an analyst survey by Refinitiv:

  • Earnings per share: $4.24, vs $4.12 expected
  • Revenue: $38.87 billion, vs $37.96 billion expected

On Tuesday, Home Depot reaffirmed its full-year guidance ahead of the key holiday quarter, noting that it expects diluted mid-single-digit earnings-per-share growth. The company also expects same-store sales to grow about 3% and an operating margin of about 15%.

A customer wearing a protective mask loads lumber onto a cart at a Home Depot store in Pleasanton, Calif., on Monday, Feb. 22, 2021.

David Paul Morris | Bloomberg | Getty Images

Investors have been keeping tabs on Home Depot’s performance and whether buyers are still spending on do-it-yourself renovations and improvements as they face persistent inflation.

“We are navigating in a unique environment,” Home Depot CEO Ted Decker said during Tuesday’s call with investors. “We cannot predict how the macroeconomic environment will affect customers going forward.”

Despite this, he added that the company believes demand will remain strong, especially as consumers continue to stay home more than usual. The typical Home Depot customer is still able to afford home improvement projects, he said.

The Home Depot said Tuesday that while its customer transactions fell just over 4%, its average ticket price rose about 9% to $89.67. The company also said its retail sales per square foot increased 5%.

Chief Financial Officer Richard McPhail noted that the company was facing an “inflationary environment not seen in four decades”, in addition to managing supply chain issues and a global shift in monetary policy.

Company executives said the rise in ticket prices was due to inflation, as well as increased demand for new products, adding that there had been some deceleration in inflation in recent months, especially in wood.

Home Depot’s gross margin rate fell to 34%, meeting analysts’ expectations. The drop is likely due to transportation costs, an unfavorable change in product mix and raw material costs, according to an analyst note from Raymond James.

– CNBC’s Robert Hum contributed to this report.

Correction: This article has been updated to reflect Home Depot earnings of $4.3 billion, or $4.24 per diluted share, up from $4.1 billion, or 3, $92 per share, compared to the same quarter last year.

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