Home Depot’s sales for the first quarter were below expectations, but don’t blame the housing market, blame the weather.
That’s how Atlanta, Georgia-based Home Depot CEO Frank Blake sees the events of the first quarter. The company posted sales of $19.7 billion, up 2.9%.
The colder-than-last-year temperatures of spring weighed heavily on sales, he said. But the company expects a weak first quarter to be counterbalanced by strength in the seasonal business in the second quarter. Such a counterbalancing has a name in Atlanta – “the bathtub effect.”
Meanwhile, reports of a demise of the housing recovery are highly exagerated, he said.
"There has been a fair amount of discussion about the fact that many indicators in the housing market have softened over the last several months, leading to the question of whether this indicates that the housing recovery has run out of steam,” Blake said. “As we parse the data from our own business, that is not what we see. The core categories in the store remained strong, pro sales continued to grow, our services business grew high single digits in the quarter, and we had another quarter of big ticket growth.”
Growth in stores, he added, will be fueled by home price appreciation, affordability and an aging housing stock in need of repair and investment.