Multiple retailers presented their earnings from the third quarter of the year lately, resulting that America’s buying power is slowly decreasing. Still, Home Depot proves the contrary, after announcing a bigger profit than they were predicting, showing that consumers still like to spend money on expensive items for their houses.
According to Bloomberg, the profit for Q3 2015 was $1.36 a share, slightly bigger than the initial prediction of $1.32. Home Depot‘s results are the living proof that people are interested in buying home-improvement items, a market that continues growing.
Multiple factors influenced the positive results
Their sales rose with 6.4 percent last quarter, reaching $21.8 billion, marking this year’s biggest bump. The same source mentions that some of the factors that lead to this were the higher employment rate, lower gasoline prices and a four-year run-up in housing prices.
“The idea that retail as an industry had a massive inflection point in October just isn’t holding up. There is a sky-is-not-falling element,” said David Shick, analyst at Stifel Financial Corp.
Even more, the results are a surprise for Home Depot itself, as the home-improvement chain stopped focusing on one of the most important growth factors: opening new stores. Currently, they’re relying on improving the locations they have, making them more productive. Also, the online business plays a very important part in their plans.
Home Depot is looking forward to improve multiple aspects of the business
As for the future plans, the retailer doesn’t think that the housing market will show any signs of slowing in the near future, even though home prices need 5 percent in order to recover from their peak before the recession.
“As we think about the home-improvement space, it’s good right now, and we think it’s going to be good for a while,” Home Depot‘s CFO Carol Tome declared in an interview.
