Home Depot got a lift in the first quarter from professionals and also homeowners stocking up on spring supplies.
Profit fell from its first quarter last year, but the national home improvement retailer beat Wall Street expectations.
"The underlying demand in our business was relatively similar to what we saw throughout fiscal 2025, despite greater consumer uncertainty and housing affordability pressure,” CEO Ted Decker said Tuesday.
The housing market has been static as Americans wrestle with rising costs and other economic concerns.
Sales of previously occupied U.S. homes were essentially flat in April, another lackluster showing for the housing market during what’s traditionally its busiest time of the year. Existing home sales edged up 0.2% last month from March to a seasonally adjusted annual rate of 4.02 million units, the National Association of Realtors said a week ago. Sales were unchanged compared to April last year.
The U.S. housing market has been in a slump dating back to 2022, the year mortgage rates began climbing from historic lows that fueled a homebuying frenzy at the start of this decade. American consumers are cautious as gas prices fuel an inflation surge of 3.8% in the U.S. Labor Department figures last week showed that gasoline prices are up more than 28% compared with a year ago.
For the three months ended May 3, Home Depot earned $3.29 billion, or $3.30 per share. A year earlier the Atlanta company earned $3.43 billion, or $3.45 per share.
Removing certain items, earnings were $3.43 per share. That's better than the $3.41 per share that analysts surveyed by FactSet were calling for.
Revenue climbed to $41.77 billion from $39.86 billion, which topped Wall Street's expectations for revenue of $41.59 billion.
Sales at stores open at least a year, a key gauge of a retailer’s health, rose 0.6%. In the U.S., comparable store sales climbed 0.4%.
Customer transactions declined 1.3% in the quarter, but the amount that shoppers spent increased to $92.76 per average receipt from $90.71 a year ago.
Neil Saunders, managing director of GlobalData, said in a statement that Home Depot is continuing to navigate well through a weak housing market and constrained consumer spending.
“Overall, Home Depot is a well-run business that has impressive dominance in its sector,” he said. “It has been right to pivot to the professional side of the market as this is where the opportunities currently lie. However, it must also ensure it stays up to par on the consumer side – and that means improving small things and making marginal gains now, as these will translate into bigger benefits as the market recovers.”
Home Depot still anticipates fiscal 2026 total sales growth of about 2.5% to 4.5% and comparable sales growth to be about flat to up 2%.
Shares rose slightly before the opening bell Tuesday.
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