Investing.com – Home Depot (NYSE:HD) stock traded 4% lower in Tuesday’s premarket as customer transactions and U.S. same-store sales dropped in the second quarter, in an indication that the pandemic-induced craze for home improvement may be cooling.
The company had record earnings in 2020 as its stores remained open in the pandemic and people looked to adapt their surroundings to a working-from-home environment, or freshen them up for selling into an increasingly hot housing market. Recent data have suggested that consumers are now redirecting spending away from such areas to sectors such as entertainment and hospitality.
The company reported a 5.8% drop to 481.7 million in customer transactions in the quarter ended August 1 compared to the second quarter of 2020.
U.S. same-store sales rose a mere 3.4%, compared to the 25% jump in the second quarter of 2020.
Average ticket size at Home Depot grew and so did sales per square foot.
Second-quarter net sales rose 8.1% year-on-year to $41.11 billion, topping the estimate of $40.48 billion. Net earnings were higher by 11% at $4.8 billion. Diluted earnings per share came in at $4.53 and surpassed analysts’ estimates of $4.42.
The slip in Home Depot's operational benchmarks affected sentiment for Loews shares (NYSE:L) as well. They traded 4.5% lower premarket.