ATLANTA (AP) – Home Depot’s second-quarter net income jumped 18 percent as surging home sales drove comparable-store sales up by double digits at home and abroad.
The nation’s biggest home improvement retailer beat Wall Street expectations and it raised its full-year earnings and revenue expectations again.
A slowly improving employment landscape and extremely low interest rates this year have created such great demand that homebuilders are having some difficulty securing land and keeping pace.
On Friday, the Commerce Department reported that builders began work on houses and apartments at a seasonally adjusted annual rate of 896,000 in July. That was up 6 percent from June, though below a recent peak of more than 1 million in March.
On Thursday the National Association of Home Builders/Wells Fargo builder sentiment index reported that confidence among U.S. homebuilders is at its highest level in nearly eight years, fueled by optimism that demand for new homes will drive sales growth into next year.
There are some signs rising mortgage rates may be slowing housing’s breakneck speed, and Home Depot did cite store performance to date as part of its reason for upping its outlook.
For the three months ended Aug. 4, Home Depot Inc. earned $1.8 billion. That compares with $1.53 billion a year ago.
Revenue for the Atlanta company climbed more than 9 percent to $22.52 billion, from $20.57 billion.
Revenue at stores open at least a year, a key indicator of a retailer’s health, increased 10.7 percent. In the U.S., the figure rose 11.4 percent.
Same-store sales data removes the volatility of locations opened or closed in the past year.
Home Depot had 2,258 stores in 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico at quarter’s end.