Home Depot, the world’s largest retailer in the home improvement sector, beat the odds to deliver the highest quarterly sales and earnings in the company’s history, latest results posted on Tuesday August 16 show.
Total sales rose 6.5% year on year (YoY) to US$43.8bn, while net earnings rose 11.5% to US$5.2bn, representing US$5.05 per diluted share.
Although inflation and supply-chain investments took a 1.5% bite out of gross margins, a significant reduction in operating expenses meant operating margins actually increased 0.4% YoY.
Home Depot committed US$1.5bn to share buybacks in the quarter, US$2bn in dividends, and US$750mln in capital expenditure.
Chief executive officer Ted Decker said: “Our performance reflects continued strength in demand for home improvement projects.
“Our team has done a fantastic job serving our customers, while continuing to navigate a challenging and dynamic environment.”
Full-year guidance has been reaffirmed at 3% sales growth with an operating margin of 15.4%.
Earnings-per-share growth for 2022 is expected to be in the mid-single digits.
Walmart beats guidance
The news comes as Walmart also saw better-than-expected results.
Total revenues for the world’s largest retailer were up 8.4% year on year to US$152.9bn, pulled down by weaker international net sales growth of 5.7%, having been negatively affected by US$1bn in currency fluctuations.
But tight margins due to markdowns, loyalty rewards and a sales mix weighted towards low-margin essentials resulted in a near 7% decline in operating income.
Walmart now expects net sales to grow 4.5% with a currency headwind of US$2.1bn.