Home Depot gains after topping comparable sales expectations; Lowe’s also higher

Home Depot (NYSE:HD) reported revenue rose 6.6% year-over-year to $40.2 billion in Q3. Comparable sales in the U.S. decreased 1.2% for the quarter that ended on October 27 to beat the consensus expectation for a drop of 3.3%.

Customer transactions were down 0.2% year-over-year to 399 million. Average ticket fell 0.8% to $88.65. Sales per retail square foot was down 2.1%.

Home Depot (HD) reported adjusted operating income for the quarter was $5.6 billion and an adjusted operating margin of 13.8%, compared with adjusted operating income of $5.5 billion and an adjusted operating margin of 14.5% a year ago. Adjusted EPS was reported at $3.78 vs. $3.65 consensus and $3.85 a year ago.

“While macroeconomic uncertainty remains, our third quarter performance exceeded our expectations,” stated CEO Ted Decker. “As weather normalized, we saw better engagement across seasonal goods and certain outdoor projects as well as incremental sales related to hurricane demand,” he added.

In general, home improvement retailers such as Home Depot (HD) have been dealing with homeowners putting off bigger projects due to higher rates and lingering concerns about inflation.

Looking ahead, Home Depot (HD) expects total sales to increase approximately 4% in FY24 and comparable sales to be down 2.5%, which was an improvement from its prior outlook of -3% to -4%. The home improvement retailer expects to add approximately 12 new stores.

Shares of Home Depot (HD) rallied 2.40% in premarket trading on Tuesday. Rival Lowe’s (LOW) edged 0.72% higher.