By Angela Christy M
Aug 18 (Reuters) - Home Depot beat Wall Street estimates for second-quarter sales and profit on Tuesday, as strong demand from customers for repair and maintenance helped offset sluggish spending on big-ticket projects such as kitchen renovations.
Stubbornly high interest rates have forced customers to cut back on large home-improvement projects, typically funded by loans, and take up painting, yard upkeep and similar work.
Elevated mortgage rates and rising home prices have also
stalled a housing market recovery, hurting demand for bigger projects from homebuilders.
Home Depot offers products across a broad price spectrum, from roughly $5 to upwards of $5,000, with an average basket size of about $90.
Sales increased 5.7% to $47.86 billion in the three months ended August 2, topping expectations of $47.27 billion, according to data compiled by LSEG.
Comparable sales rose 1.3% in the U.S. They jumped to 1.7% overall, their best gain since the third quarter of 2022.
"Some homeowners are being more careful with their budgets given rising input costs, but the desire to invest in their living spaces remains strong," said Bill Darcy, CEO of trade group National Kitchen & Bath Association.
Meanwhile, Home Depot has also built out its professional business targeting contractors, builders and carpenters through acquisitions such as SRS Distribution and GMS. The segment accounts for about half of its annual sales.
The company said on Tuesday it was rolling out its Express Delivery service nationwide to both Pro and do-it-yourself customers for a flat fee.
The service aims to deliver products such as fertilizer and adhesives in three hours or less, and the company expects faster delivery in the coming months.
The retailer has said that with U.S. homes reaching a median age of above 40, more upgrades and remodeling jobs are expected in the future in its biggest market.
Home Depot kicks off earnings reports from big-ticket retailers that could shed light on the health of the U.S. consumer, as the war with Iran intensifies cost-of-living concerns. Rival Lowe's and Target report on Wednesday, followed by Walmart a day later.
FORECASTS RETAINED
Home Depot stuck to its annual sales and profit forecasts, and expects tariff refunds to counter the impact of higher-than-expected fuel and other input costs.
Quarterly adjusted earnings per share of $4.92 beat estimates of $4.73. The company's shares rose about 2% in premarket trading.
Last week, Home Depot said CEO Ted Decker, 63, will take a temporary medical leave of absence, with Chief Financial Officer Richard McPhail and Senior Executive Vice President Ann-Marie Campbell overseeing his duties.
Decker, whose condition was not disclosed, is expected to return within the next few months and will not join the post-earnings call, a spokesperson confirmed to Reuters.
(Reporting by Angela Christy in Bengaluru; Editing by Sriraj Kalluvila)
