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Sales At Home Depot Drop Less Than Expected Due To Steady Demand

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Sales At Home Depot Drop Less Than Expected Due To Steady Demand

(CTN News) – The Home Depot Corporation reported on Tuesday that its same-store sales fell by less than expected and that profits topped estimates due to Americans spending on small-scale projects amid signs that the housing market is beginning to stabilize.

Customers in the United States are struggling to deal with sticky inflation and higher borrowing costs, so they are opting for small-scale maintenance work and outdoor projects, instead of spending large amounts on large remodeling and renovation projects.

The CEO of Home Depot Ted Decker said in a statement that while there was strength across all categories associated with smaller projects, there was still pressure across certain big-ticket, discretionary categories that continues to persist.

It is worth noting that the company recently announced a new $15 billion share repurchase program and maintained its forecasts for the year, as the company’s shares were last up in choppy premarket trading.

In the meantime, there are some signs pointing towards the stabilization of the U.S. housing market. According to the Commerce Department, new Home Depot sales increased 12.2% in May to their highest level in almost one and a half years, while the construction of new Home Depot jumped the most in over three decades.

There was a decline in customer transactions of 1.8% at Home Depot in the second quarter, but the decline was much better than the fall of 4.8% in the first quarter. There was a modest increase of 0.1% in the average ticket price, according to the company.

According to Refinitiv IBES data, comparable retail sales dropped 2% in the quarter, a 2% decline that was lower than analysts’ average estimate of a 3.54% decline in comparable retail sales, according to the company.

A number of Home Depot improvement suppliers have also indicated that demand from so-called “Pro-customers” – including professional builders and contractors – was relatively strong, as they worked on backlogs of projects to complete.

In the three months ending July 30, the company posted a profit of $4.65 per share, beating expectations of $4.45 per share by a substantial margin.

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