Home Depot surpassed expectations for third-quarter earnings in 2014, with net income rising 12.3% to $1.54 per share, the company announced early Tuesday morning.
“During the quarter we saw strong performance across all geographies led by growth in transactions and continued strength in the core of the store,” said CEO and President Craig Menear in a statement Nov. 18.
Quarterly statements from home remodeling giants Home Depot and Lowe’s are often used as indicators for the health of the home improvement industry as a whole. Home Depot’s sales to professional contractors, in particular, are seen as a sign of how smaller renovation businesses are faring.
Menear said on the earnings call that “high spend pro customers” (professionals who spend more than $10,000 annually) rose at twice the company average during Q3. This is also the 11th consecutive quarter in which sales in this category advanced.
Another important measure, the Remodeling Market Index of the National Association of Home Builders, hit a high of 57 for Q3 of 2014, the organization announced Oct. 23.
When the RMI is above 50, it means that more remodelers have reported increased activity from the last quarter than have reported decreased activity.
“We’re also experiencing higher sales compared to last year, with remodeling and more new homes. The housing industry is definitely on the upward trend,” says Joe Wilda Jr. President of Tri-Star Cabinets.
“Most remodelers remain confident that the market is improving as home owners undertake renovations, large and small,” said NAHB Remodelers Chair Paul Sullivan.
The RMI has now been above 50 for six consecutive quarters, which is in line with other assessments that the home building and renovation industry is reaching levels not seen since before the burst of the housing bubble.
“The stabilization of the RMI in the mid-50s for more than a year demonstrates the slow, steady recovery of the housing industry that we expect to continue,” said NAHB Chief Economist David Crowe.