The Atlanta-based home-improvement retailer’s results announced Tuesday beat expectations and the company raised its 2011 earnings outlook and its dividend.
Home-goods sellers are facing cautious consumer spending and a prolonged weak housing market. They’ve had to adjust to fewer consumers making large-scale home renovations by cutting costs and improving services such as online shopping and customer service.
Home Depot’s smaller rival Lowe’s Cos. reported Monday its third-quarter net income fell 44 percent on restructuring costs as it closes stores. Lowe’s CEO Robert Niblock said Monday he didn’t expect any significant rebound in the housing market until 2013.
Home Depot CEO Frank Blake echoed that sentiment.
“In the U.S., we still do not see, and do not expect to see in the near term, any meaningful tailwind from the housing market,” Blake said in a call with analysts. “In this type of environment, it is critical that we effectively invest in our business and keep focused on customer service.”
Some examples of Home Depot’s investments are a new “buy online, pick up in store” program, a new scheduling system for staffers and a new return-to-vendor process.
Home Depot said consumers are spending slightly more on their homes. Storm-related repairs helped results after Hurricane Irene swept up the East Coast in August. But spending was up in all regions. Blake said the Western division, which was not affected by the hurricane, was the strongest region.
The number of customers making purchases rose 1 percent, the third sequential quarterly increase. The average ticket rose 3 percent to $53.03. Products related to smaller maintenance and repair categories like pipes and fittings, hand tools and appliance parts sold well.