Home Depot (HD) Stock Rises on Record Revenue

  • Home Depot (HD) beat on second-quarter earnings and posted record profit and revenue.
  • The company's consumer transactions fell slightly for the period as well.
  • HD stock is headed 4% higher in early trading today.
the outside of a home depot store
Source: Jonathan Weiss / Shutterstock.com

This morning, Home Depot (NYSE:HD) released its second-quarter 2022 financial results. The company topped analyst estimates for both revenue and profits. However, there was a mild year-over-year (YOY) dip in customer transactions. Is that a deal breaker for HD stock investors? Apparently not. Shares are up 4% so far today.

Home Depot is the king of U.S. home improvement stores, so its financial standing can offer some important insight into the U.S. economy as a whole. As such, Wall Street watched today’s quarterly results rather closely.

The data points came in largely positive in the report. For example, Q2 revenue grew 6.5% YOY to $43.8 billion. That slightly beat the analyst consensus estimate of $43.4 billion. Earnings of $5.05 per share also exceeded the $4.95 per share analysts had expected. Neither of these are huge Street beats, but they are respectable showings for Home Depot.

What’s Happening with HD Stock?

After the first half-hour of trading, HD stock pulled 2% into the green today. This represents a sharp reversal; the stock had been trading lower immediately after the opening bell.

Perhaps some investors were concerned with the fact that Home Depot’s quarterly customer transactions declined 3% YOY, from 481.7 million in Q2 2021 to 467.4 million in Q2 2022.

It didn’t take long for traders to look at the big picture and decide that Home Depot is generally on the right track, however. In the report, President and CEO Ted Decker pointed out that Home Depot “delivered the highest quarterly sales and earnings in our company’s history.”

At the same time, Decker acknowledged the “challenging and dynamic environment” in which the company has had to conduct business. Presumably, the CEO has high inflation in mind, along with high interest rates, which tend to inhibit new home projects.

There are still challenges for Home Depot ahead and HD stock still has some catching up to do in 2022. However, it is a good sign for the company — and possibly for the U.S. economy — that Home Depot managed to turn a difficult quarter into a profitable one.

On the date of publication, David Moadel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.


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