When Storms Strike, Home Depot’s Registers Ring… To The Tune of $40 BILLION?

You’ve gotta hand it to Mother Nature and some power tools, when they team up, even cautious consumers pull out of their wallets like that “shut up and take my money” meme. Home Depot just reported its latest quarterly earnings, and it looks like hurricanes, a warmer fall, and a big-ticket acquisition provided a little shock therapy to an otherwise anemic DIY market.

Home Depot’s Q3 revenue rose by a solid 6.6%, hitting $40.22 billion and beating Wall Street’s expectations of $39.32 billion. The big jump in sales came from folding in its newest acquisition, SRS Distribution, a Texas-based supplier specializing in roofing and landscaping supplies for home pros. This $18.25 billion deal, Home Depot’s largest ever, added around $6.4 billion to its bottom line. (Much needed good news, considering their co-founder, Atlanta Falcons owner Arthur Blank, has been getting roasted for allegedly stiffing his flight attendants on overtime pay. Classy move, Arthur.)

But this increase wasn’t just from smart business moves, another part of their Q3 success was sheer luck (at the misfortune of others). Hurricanes Helene and Milton pushed homeowners to stock up on essentials, with customers loading their carts with plywood, batteries, and generators to prep for storms, then returning to pick up materials to repair the aftermath. Home Depot’s CFO, Richard McPhail, even mentioned that these hurricanes alone contributed about 0.5% to the sales bump this quarter.

(Source: The Home Depot)

And as if hurricanes weren’t enough, warmer-than-usual weather across much of the U.S. kept the outdoor projects alive. Late-season grillers and wannabe painters were stocking up on outdoor goods and paint supplies, milking every last sunny weekend before winter kicks in. (I can attest, because I was one of them).

Despite these impressive numbers, Home Depot is still dealing with cautious consumers. Higher interest rates have made homeowners think twice before maxing out the Amex for that massive backyard reno or $50,000 kitchen upgrade. According to McPhail, customers have plenty of home project ideas, but they’re staying put waiting for a friendlier borrowing environment (aka Jerome to start making that printer go BRRRRRRRRR). 

Now the data nerds tell us about 90% of Home Depot’s DIY customers own their homes, meaning they’re not exactly cash-strapped. But they're not rushing into big-ticket items, either. Home Depot’s CEO Ted Decker noted that sales at stores open at least a year fell 1.3% (but hey, that’s better than Wall Street’s predicted 3.25% decline), marking eight consecutive quarters of negative comps but showing signs of improvement.

The company’s massive 12-foot skeleton, Skelly (you know the ones that have your neighborhood HOA president pulling her hair out) may have kept Halloween lively, but now they’re hoping inflatable Santas and emergency snow supplies will keep the registers ringing. Although the stock has dropped about 2% this month, it’s still up 17% for the year, proving doers are still getting it done.

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Stock.News does not have positions in companies mentioned.