By Tomi Kilgore, MarketWatch
Shoppers hit their local Home Depot Inc. in big numbers during the fiscal second-quarter, with the latest results showing that customers were willing to spend to make their homes coronavirus-ready.
“During the second quarter, big-ticket comp transactions, or those over $1,000, were up approximately 16%,” said Ted Decker, Home Depot’s /zigman2/quotes/208081807/composite HD +0.49% executive vice president of merchandising, on the Tuesday earnings call, according to a FactSet transcript.
“We saw very strong performance across a number of big-ticket categories like appliances, riding lawn mowers and patio furniture.”
Do-it-yourself projects included outdoor projects involving sheds, fences and gardens as well as indoor upgrades like flooring, lighting and painting.
The home improvement giant saw comparable sales climb 23.4%, with comparable sales in the U.S. up 25%.
Still, Home Depot stock edged down 1.1% in Tuesday trading. For the year to date, shares have jumped 30.5% while the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.66% is down 2.7% for the period.
Home Depot executives are unsure of the remainder of the year, even if the first part of 2020 was a blockbuster.
“[W]e’re cautious to extrapolate trends from the first half of the year into a forecast for the remainder of the year, particularly given the tremendous amount of uncertainty we face with regards to the duration and continued impacts of the virus,” said Home Depot Chief Executive Craig Menear, according to FactSet.
UBS thinks smaller projects were a contributing factor as well.
“Customers likely performed a number of smaller projects, driving up traffic,” wrote analysts led by Michael Lasser. “Home Depot’s ticket was up 10.1% probably supported by customer trip consolidation, big-ticket strength, and some lumber inflation.”
UBS rates Home Depot stock buy with a $300 price target.
Shoppers were also heading to Home Depot online in large numbers. Sales that used the company’s online platforms were up about double for the quarter, and more than 60% picked up their orders in a store.
Placer.ai data shows that Home Depot visits were up 19.1% year-over-year in June and 19.0% in July. On August 1 and August 2, the increase was 34.3% and 38.2% respectively.