Home Depot‘s sales continue to surge, though same-store sales appeared to come back to earth after a year in which the home improvement chain outperformed expectations repeatedly.
For the three months ended August 1, sales climbed to $41.12 billion from $38.05 billion. Chairman and CEO Craig Menear said in a prepared statement Tuesday that this was the first time the chain surpassed quarterly sales of more than $40 billion.
Revenue also surpassed the $40.71 billion analysts were expecting, according to a survey by Zacks Investment Research.
However, sales at stores open at least a year, a key indicator of a retailer’s health, increased 4.5%, and 3.4% in the U.S. Wall Street had expected same-store sales of 5.4% according to FactSet.
And while the average receipt per ring-up at Home Depot registers was higher, customer traffic slowed compared with the period last year when the pandemic kicked off frenzied do-it-yourself projects at home.
Shares fell 5% at the opening bell.
Home improvement stores have filled during the pandemic as people working from home took on new projects. Many also moved to places with more room for the home office, and that too fueled sales.
Yet sales of new homes fell for a third straight month in June, dropping by 6.6% to the lowest level in more than a year.
Neil Saunders, managing director of GlobalData, said in an emailed statement that most of last year’s sales growth was due to an increase in customers and a sharp rise in the volume of products bought thanks to the remodeling and decorating uptick that happened while people quarantined.
“These trends are now abating, albeit gradually, which is evident in the decline in the number of shoppers visiting Home Depot during the quarter,” he said.
Home Depot Inc. earned $4.81 billion, or $4.53 per share, in the quarter. That compares with $4.33 billion, or $4.02 per share, a year ago. This beat the $4.43 per share that Wall Street predicted.
The Atlanta company didn’t provide a full-year forecast.