Home Depot's Tariff Refund Consumed by Unplanned Costs
Home Depot's second quarter earnings report beat expectations, but the company's full-year outlook remains unchanged. The retailer reported adjusted earnings of $4.92 a share, beating the consensus estimate of $4.73, and sales grew 5.7% to $47.9 billion.
The key number in the report is a $685 million tariff refund benefit that was expected to boost margins, but management said that most of this benefit will be consumed by unplanned costs such as fuel and energy price increases. Without the refund, the company's margin gain would not have held.
Despite this, Home Depot's comparable sales rose 1.7%, with 13 out of 16 merchandising departments posting positive results. Portable power tools had a record sales quarter, and online sales grew 11% for the fifth straight quarter.