Home Depot beat quarterly profit estimates on Tuesday because it sold more big-ticket items to high-spending builders and laborers while flagging the potential impact of U.S. President Donald Trump’s continuing trade spat with China on consumers.
The home improvement chain, which has distanced itself from co-founder Bernie Marcus’ assistance for Trump’s re-election campaign, blamed the impact of the trade struggle in addition to a continued slump in timber prices for a cut in its full-year sales estimate.
Nonetheless, the agency’s shares were up 4.4% at $217.11 by noon as traders ignored the warning, which analysts said was widely anticipated.
The US’ suggested tariffs on more $300 billion worth of products have sent jitters through Wall Street, with firms warning that prices for U.S. buyers could rise, doubtlessly hurting demand.
Home Depot estimated the intended 10% taxes, currently scheduled to roll out on Sept. 1 and Dec. 15, along with the 25% duties already in effect, may raise its cost of sales by $2 billion – about 2% of its annual sales.
Wall Street analysts stated the impact from a recent round of duties on earnings is more likely to come from a strike to shopper demand rather than a rise in expenses.
Home Depot said it now expects 2019 sales to grow about 2.3%, down from a prior estimation of a 3.3% rise.
However, the corporate recorded a much bigger-than-expected Q2 revenue, selling more goods to professional clients such as electricians, plumbers, and builders who usually make more significant, more regular purchases.