Home Depot and no doubt all other home improvement retailers are benefiting from the upswing in the economy, the declining unemployment rate and soaring consumer confidence.
The nation’s largest home improvement retailer this week reported better than expected profit and revenue in the fourth quarter. That’s not surprising.
The Great Recession and its terribly long aftermath had home and business owners hunkered down, waiting for economic conditions to improve. That negatively affected people’s ability to buy new homes and take care of repairs, decorating upgrades and even needed maintenance on the property they were in.
Now that unemployment is under 5 percent and people are feeling more financially secure they are tackling a backlog of needs. That includes pent-up new home purchases — often to trade up — accompanied by new furniture, appliances, paint, and bathroom and kitchen fixtures for upgrades.
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Home Depot stands out in many major American cities as the place to go for improvement needs — especially for do-it-yourselfers.
That resulted in the retailer earning $1.47 billion for the three months ending Jan. 31, up from $1.38 billion in the fourth quarter of 2014, The Associated Press reports.
And is it any wonder? Except for the huge snowstorm that hit the East Coast, the weather has been unseasonably warm, enabling people to get home improvement work done. Even when it was cold outside, it prompted many people to do painting, wallpapering, electrical, plumbing, woodworking and other upgrades to their homes indoors.
It all caused revenue for Home Depot to increase to $20.98 billion from $19.16 billion, which trumped analyst projections. The corporation expects fiscal 2016 earnings of $6.12 to $6.18 per share, up from $5.46 per share in 2015. Sales are expected to go up 5.1 to 6 percent.
Whether people believe in global warming or the groundhog’s prediction this year of an early spring, the warmer weather is certain to spur more home improvement activity. Spring is when Home Depot, Lowe’s, Ace Hardware and other retailers put out shrubs, bushes, trees, perennials, annuals, sod, and garden seeds and plants for people who have been itching all winter to exercise their green thumbs. They look forward to a harvest into fall of fruits, vegetables, greens and herbs.
Consumers even during the Great Recession spent hundreds of dollars to spruce up their property. The drive-by appearance always gives people the feeling that everything is OK even though it wasn’t during the economic downturn.
Sales at Home Depot and other retailers this spring are expected to spike partly because folks have more money to do more home, yard and gardening improvements — even doing that long overdue painting of the exterior of their homes. But the other piece of the puzzle is low gasoline prices give homeowners even more cash to pour into their homes instead of using the dollars just to get from place to place in their cars.
Home Depot and other retailers will definitely log it as a win in receipts. Home and business owners will splurge and enjoy the benefits of their property and property values looking good again.