Home Depot earnings beat Wall Street estimates, as retailer breaks comparable sales losing streak

Home Depot on Tuesday topped Wall Street’s quarterly sales expectations, even as elevated interest rates and housing prices dampened consumer demand for large remodels and pricier projects.

For the full year ahead, the company said it expects total sales to grow by 2.8% and comparable sales, which take out the impact of one-time factors like store openings and calendar differences, to increase by about 1%. Home Depot projected adjusted earnings per share will decline about 2% compared with the prior year.

In an interview with CNBC, Chief Financial Officer Richard McPhail said “housing is still frozen by mortgage rates.” Yet he said Home Depot saw broad-based growth, as sales increased in about half of its merchandise categories and 15 of its 19 U.S. geographic regions.

Home Depot anticipates consumers will stop putting off projects as they gradually get used to higher interest rates, rather than waiting for them to fall, McPhail said. 

“They tell us their lives are moving on,” he said. “Their families are growing. They’re moving for a new job. They’re upsizing their home. They want to upgrade their standard of living. Home improvement always persists, and so the question, I think, will be around the mindset of whether long-term rates have gotten to a new normal.”