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The company’s shares rose 4% to $307.99 in premarket trading as Home Depot (NYSE:HD) also posted a surprise increase in quarterly same-store sales.
During the COVID-19 lockdowns people took up several do-it-yourself (DIY) home projects and hired professionals to upgrade their homes, lifting sales at Home Depot and smaller rival Lowe’s (NYSE:LOW) Cos Inc in 2020.
Sales from DIY customers have slowed with the easing of pandemic-related curbs, according to analysts.
However, demand from home-improvement professionals is holding up despite price increases of products due to higher lumber and copper costs.
About 40% to 45% of Home Depot’s customers are professionals, compared with 20% to 25% for Lowe’s, according to brokerage Jefferies.
Home Depot now expects comparable sales to increase about 3% in fiscal 2022, compared with its previous forecast of a slight positive growth. Analysts were expecting a 1.4% increase, according to IBES data from Refinitiv.
The U.S. housing market remains hot amid tight supply helping sales at Home Depot and Lowe’s, even as rising mortgage rates might be a dampener in the coming months.
Home Depot expects earnings per share growth to be in the mid-single digits percentage range in fiscal 2022, compared with its previous forecast of low-single digits percentage growth.
Expect sales and profit trends at Home Depot to help allay widespread market concerns of easing consumer spending at least for a while, Oppenheimer analyst Brian Nagel said.
Same-store sales rose 2.2% in the first quarter ended May 1, compared with analysts’ estimates of a 2.7% decline.
Home Depot earned $4.09 per share in the reported quarter, beating estimates of $3.68.
