Home Depot Reflects Housing Recovery with Strong Earnings

Home Depot Reflects Housing Recovery with Strong EarningsAs the housing recovery goes, so goes Home Depot. That notion is reality these days as the largest home-improvement retailer blew past Wall Street expectations with a 17 percent jump in earnings.
Sales surged 9.5 percent for Home Depot in the three months through Aug. 4. Fixed mortgage rates have jumped a full percentage point over the past several weeks, but home sales and home prices remain strong as inventories tighten in some markets.
Home builders say demand for supplies is strong and more homeowners are able to invest in renovations as many borrowers have regained equity with rising home values.
“The second quarter results exceeded our expectations as our business benefited from a rebound in our seasonal categories, continued strength in the core of the store and the recovering housing market in the U.S.,” said Frank Blake, chairman & CEO.
Apparently, home-improvement shoppers spent more per visit to Home Depot, compared to weaker customer traffic and sales figures reported by Walmart Stores, J.C. Penney, Macy’s  and other retailers that posted poor results in recent days.
Atlanta-based Home Depot has benefited from looser credit standards, as customers with lower credit scores were able to get approved to use its private-label credit cards.
Home Depot’s professional customers represent 36 percent of its sales. They were also were able to get increased lines of credit, which rose by an average $200 from a year earlier to $68,000.
The company has urged underwriters to help professional customers get extended lines of credit.

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