Home Depot (HD) earnings Q3 2024

Home Depot‘s quarterly sales rose more than 6% year over year, as it folded in a newly acquired business and hurricane-related repairs and better weather in many parts of the country boosted demand for home improvement supplies, the company said Tuesday.

The retailer also raised its full-year outlook to reflect its better-than-expected third-quarter results and some increased hurricane-related demand in the current quarter. It now projects total sales to increase about 4%, including the impact of acquiring SRS Distribution. It previously expected total sales to rise by between 2.5% and 3.5% for the year. Both of those outlooks include a lift from a 53rd week in the fiscal year and an approximately $6.4 billion contribution from SRS, which sells supplies to professionals in the roofing, landscaping and pool businesses.

The company expects comparable sales to decline about 2.5% for the 52-week period. Home Depot previously projected that industry metric, which includes the company’s website and stores open for more than a year, would drop by 3% to 4% compared with the prior fiscal year. 

In an interview with CNBC, Chief Financial Officer Richard McPhail said consumers are still deferring purchases as they wait for lower mortgage rates and borrowing costs and express caution about the economy.

“There is pent-up demand for projects,” he said. “Our customers tell us that their lives are changing. Their families are growing. They’re upsizing, they’re downsizing. They need to move for a job. There is demand for remodeling, and they are putting it on hold until they see a more favorable financing environment. And so the demand is there, the question is, when it’s unlocked.”

Home Depot customers have continued to put off projects, even though they’re in good financial shape, he said. About 90% of the company’s do-it-yourself customers own their homes.

Here’s what the company reported compared with what Wall Street expected for the three-month period that ended Oct. 27, according to a survey of analysts by LSEG:

• Earnings per share: $3.67 vs. $3.64 per share expected
• Revenue: $40.22 billion vs. $39.32 billion expected

Home Depot shares fell about 1% on Tuesday, closing at $403.08.

Home Depot’s sales have gotten hit by economic factors, as higher interest rates slow housing turnover and more than two years of high inflation makes homeowners less willing to spring for discretionary purchases and do-it-yourself projects. The company had cut its full-year forecast for comparable sales in August, citing consumer uncertainty.

Those dynamics persisted in recent months, McPhail said.

Home Depot’s net income for the fiscal third quarter dropped to $3.65 billion, or $3.67 per share, from $3.81 billion, or $3.81 per share, in the year-ago period. Revenue climbed 6.6% from $37.71 billion in the year-ago period. 

Comparable sales fell 1.3% in the quarter…