Home Depot Q2 sales rise to $30.8 billion, but DIY retailer readies for China tariff impact

The world’s largest home improvement retailer – Home Depot – has seen sales grow 1.2% in Q2 2019 (compared with Q2 2018).

Sales reached $30.8 billion, with comparable sales up 3%. The positive performance comes after a strong fiscal 2018 where sales grew 7.2%.

Home Depot boss Craig Menear said a stable US consumer environment and the strong housing sector supported the growth, but noted lumber price deflation and the “potential impacts to US consumers arising from recently announced tariffs“.

News outlets have dug into the potential impact of tariffs on Home Depot, which are anticipated to add a 2% or $2 billion cost on US sales for the giant retailer. Suppliers to Home Depot are said to be moving some manufacturing out to Taiwan and Vietnam to avoid being hit, which will halve the impact to a mere $1 billion.

CEO statement

“We were pleased with our results as we delivered accelerating comp performance throughout the quarter,” said Craig Menear, Chairman, CEO and President. “I would like to thank our associates for their hard work and continued dedication to our customers.”

“We are encouraged by the momentum we are seeing from our strategic investments and believe that the current health of the U.S. consumer and a stable housing environment continue to support our business. That being said, lumber prices have declined significantly compared to last year, which impacts our sales growth. As a result, today we are updating our sales guidance to account primarily for continued lumber price deflation, as well as potential impacts to the U.S. consumer arising from recently announced tariffs. We are reaffirming our earnings-per-share growth guidance for fiscal 2019.”

The firm also announced that incoming CFO Richard McPhail and EVP of Supply Chain and Production Development Mark Holifield are to present at Goldman Sachs’ 26th Annual Global Retailing Conference in New York City on 5 September.