The home improvement retailer told investors on Tuesday that it wasn’t seeing any differences in consumer behavior yet.
Home Depot’s average ticket climbed 11.4% in the quarter, fueled largely by inflation. But executives also said that consumers are trading up, not trading down. For example, consumers are switching from gas-powered lawn mowers to more expensive battery-powered options, according to Home Depot’s Vice President of Merchandising Jeff Kinnaird.
This behavior likely is due to the fact that the overwhelming majority of Home Depot customers are homeowners, who have seen their home equity values soar in the last two years. CFO Richard McPhail said on the call that more than 90% of its do-it-yourself customers own their homes, while basically all of its sales to contractors are on behalf of a homeowner.
McPhail also said that roughly 93% of its customers with mortgages have fixed rates. As interest rates and housing prices rise, consumers who consider moving are opting instead to stay in their current homes and remodel them instead.