Home Depot (HD) reported mixed results for second quarter, with revenue of $43.18 billion compared to the expected $43.79 billion, and adjusted earnings of $4.67 per share compared to the expected $4.52 per share. The company lowered its full-year outlook, now expecting sales to decline 3% to 4%, but will things turn around?
Adam Baumgarten, Managing Director at Zelman Associates, appears on Catalysts to share his insights on Home Depot’s latest quarterly results and how they may impact the overall housing market.
Looking at Home Depot’s numbers, Baumgarten said, “I think home improvement spending is normalizing across the board. You know, we had some big increases in ’20 and ’21, and we’ve been giving back some of that. Part of that is a shift in share from goods to services. And I think within goods, home improvement spending has really spiked.”
He continued: “We believe consumer spending as a percentage of overall spending will return to some degree of normalcy by the end of this year, so we believe we will see a return to growth on a like-for-like basis next year. But a recession, which is not factored into our forecasts, could boost growth even further. And I think there was a lot of optimism at the start of the year because there was a high expectation of lower interest rates, but as we all know, that expectation has now been boosted.”
To learn more about expert insights and the latest market trends, click here to watch this full episode of Catalysts.
This post was written by Nicholas Giacobino