Home Depot Reports Strong Earnings Amidst Housing Challenges
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Earnings Results Home Depot revenue rises even as customers turn away from bigger projects
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CNBCLowe's rival Home Depot said in its earnings report on Tuesday that the company did not see customers returning to big projects and continues to operate in "frozen housing market conditions."
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Home Depot reported a very good quarter, executing well on things it can control, despite what CFO Richard McPhail called "frozen housing conditions." The Club stock rose modestly in Tuesday's down market. Revenue for Home Depot's second quarter advanced 5.7% year over year to $47.86 billion, outpacing the $47.27 billion expected by LSEG. Earnings per share (EPS) increased 5.1% to $4.92, exceeding the LSEG-compiled $4.73 estimate. The July quarter ended Aug. 2. Same-store sales , or comps, increased 1.7% versus the year-ago period, nearly double the 0.9% estimate from FactSet and almost triple first-quarter comps of 0.6%.
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MarketWatchShares of Home Depot rose early Tuesday after the retailer’s second-quarter results beat Wall Street expectations even as customers continued to prioritize smaller home-improvement projects over more complex and costly ones.
FortuneHome Depot’s sales improved during its second quarter as customers focused on smaller projects during the summer months with the U.S. housing sector still mired in a slump.
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Home Depot The retailer collected $730 million in IEEPA tariff refunds in a single quarter, arriving in a lump sum near the end of June. CFO Richard McPhail said on Tuesday’s Q2 call that $685 million of that related to inventory already sold, cutting cost of goods sold immediately and producing a 145 basis point gross margin benefit. The remaining $45 million is still sitting in inventory and will flow through as that inventory sells.
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CNBCThe refunds of the tariffs, which President Donald Trump put on using the International Emergency Economic Powers Act (IEEPA), were the result of the Supreme Court's ruling in February that the levies were unconstitutional. McPhail said on the call that the refund benefits to Home Depot's full-year results will be muted, as the money will be "used to offset unplanned and rising cost pressures throughout the year." The refund in the second quarter went to reducing the company's total cost of goods sold. That, in turn, means the gross margin increase of nearly 27 basis points to 33.7% was not as strong as reported.
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Home Depot said that its outlook includes tariff refunds, which are expected to partially offset higher fuel, energy, and other product input costs throughout the year. Last year, the company said that it didn’t expect to raise prices because of tariffs, but executive Billy Bastek said at the time that some products that were on Home Depot shelves may disappear.
3 details only one outlet reported
Independent claims that didn't surface elsewhere in our corpus. Treat as supplementary — not corroborated across outlets.
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01 Bloomberg Lowe’s Cuts Outlook as Soft Housing Market Curbs Demand Lowe’s Cos. cut its outlook for the full year after posting results that missed Wall Street estimates, showing how a stubbornly weak housing market is eroding the home-improvement retailer’s performance.
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02 CNBC Lowe's on Wednesday reported mixed results as the home improvement retailer said it saw "pressure" in spending on projects.
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03 Fortune The refunds stem from a February Supreme Court ruling that forced Customs and Border Protection to start returning duties collected under a since-struck-down law. That money is now showing up on the books of big companies like Home Depot, Amazon, and Walmart, each with its own approach.
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