Aug 19, 2021 (IAM Newswire via COMTEX) -- Home Depot Inc. /zigman2/quotes/208081807/composite HD +0.89% revealed its sales rose more slowly than earlier in the pandemic that brought on a rapid surge in home improvement spending. The earnings and revenue beats were not enough to offset weakening DIY trends that did all the talking. Shares tumbled 5% as the home improvement retailer revealed fewer customers visited its shops without providing investors with a full-year outlook citing uncertainty revolving around the delta variant.
Second quarter figures
For the quarter ended on August 1 [st] , revenue rose 8.1% as it amounted to $41.12 billion, exceeding the expected $40.79 billion and translating to earnings per share amounted to $4.53, exceeding the expected $4.44. Net income of $4.81 billion also grew from last year's quarter when it amounted to $4.33 billion. U.S. same-store sales were up merely 3.4% compared to the 25% increase in the year-ago period, with total same-store sales rising 4.5%, short of the more than 5% growth Wall Street had expected.
Just a year earlier, customers flocked to buy paint, wood, gardening supplies and other materials as they wanted to make their homes prettier. However, CEO Craig Menear said that while consumers are returning to pre-pandemic activities that take place outside their homes, people are still engaged in house improvement projects, and increasingly larger projects. For a second quarter in a row, sales from the professional customer outpaced those of the DIY customer. The strongest departments were kitchen, bath and lumber. Meanwhile, paint, hardware, indoor as well as outdoor garden had negative sales on a YoY basis. Compared to last year's quarter, customer transactions dropped 5.8% but the average ticket was 11.3% larger, supporting trend of larger projects usually taken on by contractors. Sales per retail square foot grew 5.3% YoY to $663.05. It is important to note that inflation was one of the factors boosting sales.
Home Depot faces tough comparisons with a year earlier, when its brick-and-mortar stores remained open during the pandemic that inspired Americans to remodel their homes while in self-quarantine. Revenue growth is expected to slow this year. Both Home Depot and its rival Lowe's Companies Inc /zigman2/quotes/205563664/composite LOW +1.39% are focusing on professionals such as electricians as they typically place orders in bulk. Last year, Home Depot acquired HD Supply who is one of the nation's largest distributor of appliances, plumbing and electrical equipment for that purpose. While Home Depot didn't offer a complete outlook for the full year, CFO revealed that U.S. same-store sales during the first two weeks of August followed second quarter trends. Richard McPhail evaluated customer engagement and demand for home improvement as healthy. McPhail is seeing a supportive environment for home improvement spending over the next few years. Unfortunately for this quarter's results, the pandemic and its everything-but-usual circumstances simply set the bar kind of high.
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