Recently people have been worried about a recession and how high mortgage rates and inflation may kill consumer spending and this will hurt Home Depot which boomed during COVID-19.
The concerns about the retailing industry were made worse recently when Walmart and Target both disappointed investors with forecasts and poor results.
This is not a Home Depot problem and we still love the company. Here’s why.
1. Walmart and Target are not like Home Depot at all.
Walmart and Target have been poor innovators for the last 10 years, unlike Home Depot, have been poor performers and do not even have similar business lines or customer preferences!
Ask Amazon where all its customers have come from.
2. Home Depot exceeded and raised its forecasts for the next year and beyond.
3. For more than 10 years home construction has lagged demographic needs.
The pipeline of demand is huge!
Two thirds of millennials plan to buy a home in the next two years and they all have jobs.
The number one reason why?
Improving financial situations.
Rising wages are not all bad!
So much for the recession fears for the young at heart.
They have a future to build.
4. The company sees above trend construction to continue for seven-to-10 years.
5. Young millennials unable to afford new homes are buying old fixer uppers and doing the renovations themselves or hiring contractors.
Home Depot is the best at satisfying their needs and giving them delivery and tips on how to do the work.
No one does this better than Home Depot.
Presently doom and gloom is casting a pall over the amazing long term trends which should support continued out performance by the second largest retailer in the world.
The company has achieved that status by being a leading innovator and delivering a compelling product to its customers, employing and paying its well-trained people fairly, and rewarding long term investors with continued excellent prospects.