(Reuters) - Home Depot Inc’s (HD.N) profit and revenue topped estimates on Tuesday despite signs of a slowdown in the housing market, boosted by a rebound in demand for seasonal products and as shoppers spent more to remodel their homes.
A Home Depot delivery truck drives on Wall St. in New York City, U.S., August 16, 2017. REUTERS/Brendan McDermid
The No. 1 U.S. home improvement chain also raised its earnings and revenue forecasts for the year.
Consumers are investing in their homes, even as higher mortgage rates and rising real estate prices have hurt home sales this summer. Sales of new U.S. single-family homes fell to an eight-month low in June and data for the prior month was revised sharply lower, the latest indication the housing market was slowing down.
“The (company’s) sales strength is likely to garner the most attention as we sense there had been some fear recently that the overall macro picture had been slowing down,” Stifel analyst John Baugh said in a note.
Home Depot Chief Executive Officer Craig Menear sought to allay those concerns, saying the U.S. economy and the factors that drive home-improvement spending remained strong. “We feel very positive about the strength of the home improvement sector and the customers’ willingness to spend.”
Homeowners are spending more as prices appreciate and they view their homes as an investment and not an expense, Menear said. Home equity values have increased over 120 percent since 2011 in the United States, about $73,000 per owner in terms of equity, he said. He did not cite the source of the data.
Second-quarter sales rebounded from the first quarter when cooler-than-usual weather in some parts of the United States hurt demand for spring season products.
Menear said a
