Home Depot hopes to cut costs to reduce impact of tariffs on prices
House Depot CEO Craig Menear mentioned the corporate goals to reduce the affect that potential tariffs may have on costs by slicing prices elsewhere alongside its provide chain.
The corporate makes 70% of its items domestically, which additionally lessens the impact, Menear mentioned in an interview Monday on CNBC’s “Squawk on the Street. “
“Some of it has to get passed through,” he mentioned, however added that it was too early to know precisely the place the affect would land.
“There’s always ways — when you look at the entire value chain between the supplier all the way through our operations — … to be able to offset these costs,” he mentioned.
In May, House Depot mentioned it anticipated adjusted earnings per share to rise 3.1% to $10.03 per share, with a 5% enhance in same-store gross sales and a 3.3% enhance in income.
For the second quarter, analysts surveyed by Refinitiv estimate the corporate will earn $3.09 per share on $31 billion in income.
Menear additionally mentioned the latest drop within the value of lumber continues to place stress on the house enchancment retailer, however that demand has picked up with the bettering summer time climate. He mentioned the corporate’s skilled contractors are busy and booked at any time when he calls the shops.
Customers are additionally spending extra on reworking and residential upkeep because the nation’s housing provide ages, he mentioned, including that 52% of the housing inventory within the U.S. is 40 years or older.
Menear additionally indicated that Lowe’s has been and can proceed to be a great competitor, and that their addition of a brand new CEO does not change that.
“We are looking forward to a great finish to the year,” he mentioned.
House Depot’s shares have risen by greater than 20% to this point this 12 months, giving it a market worth of about $230 billion as of Friday’s closing value of $209.39 a share. Its shares have been down 1.9% in intraday buying and selling Monday.