Home owners are turning to the professionals to make major upgrades to their living spaces — and Home Depot is reaping the benefits.
On a call with analysts following the company's fiscal second-quarter earnings report, Home Depot CEO Craig Menear said revenue from its so-called Pro customers grew at a faster rate than the company average. This gives him confidence about the second half of the year — even in the face of slower same-store sales growth, tough comparisons and a potential pullback in GDP expansion.
"When you talk to pros they're busier than they were a year ago," Menear said, adding his company is grabbing share from competitors. The integration of Interline, a business Home Depot acquired last year that caters to professional customers, should help the retailer continue to expand its Pro business, management said.
Sales of big-ticket items that cost more than $900 rose 8.1 percent during the quarter, led by strength in heating and air conditioning, appliances, and roofing. Meanwhile, professional customers added more items to their baskets during the quarter, helping drive higher the average amount spent per checkout. Paired with a solid housing backdrop, these trends lifted the company's sales by 6.6 percent during the three-month period, to $26.47 billion.
After reporting record sales and profits during the second quarter, Home Depot reiterated its forecast for revenue to jump 6.3 percent this year, and raised its earnings forecast by 4 cents a share, to $6.31.