Why the Home Depot Results Are Good for the Home Improvement Category

Even though its sales for the most recent quarter were slightly down, there were many positive things in Home Depot’s second quarter earnings results.

If there is one retailer most closely followed by those in the lumber and wood products sectors it is Home Depot. So, its second quarter results, released last week, were studied for signs of strength in the overall home improvement business. And while there were still some red flags in its numbers, they were smaller and perhaps a little less red as indicators of what’s going on in the economy.

While reporting earnings that beat analyst estimates Home Depot did see same-store sales fall 2%. That’s less than was expected but more importantly the big box retailer continued its guidance for the full year, a reassuring forecast for those who are worried the housing and home improvement sectors are going to continue to get worse before they get better.

“We remain very positive on the medium-to-long-term outlook for home improvement,” said Ted Decker, president and CEO of the giant company. Decker said while some “big-ticket, discretionary categories” continued to show softness, “there was strength in categories associated with smaller projects.” That would seem to indicate that the DIY customer is still out there and doing home improvement jobs while bigger, builder-led spending remained challenged.

Home Depot’s big competitor, Lowe’s, was expected to release its earnings as IWF Network News was being posted.

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