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Normally, earnings conference calls are barely more interesting than watching paint dry, but Home Depot's session this morning was sort of instructive. As with the home sales numbers below, they show an economy stuck in neutral - no longer a disaster but far from recovered. The big picture is that the world's largest home improvement retailer reported an 8.9 percent drop in third-quarter earnings. Business did improve in California, but CEO Frank Blake, illustrating the hit-and-miss nature of things, pointed out that some areas of the state did better than others.
"You see different patterns within different cities. So, for example, in California we see relatively more stability in, say, the San Diego area than in the Los Angeles area."
Some markets have bottomed out, some markets have a few more quarters to go, and some markets they're just not sure. All told, 36 the top 40 markets performed better (the Atlantic and Mid-South regions fared best), though the average transaction fell 7.1 percent from last year, to $51.89. Also revealing are the types of items being purchased. From the NYT:
Indeed, the chain's weakest categories were goods typically used by professional builders -- plywood, lumber, concrete, gypsum, electrical and millwork. And transactions for goods of $900 and above, which represent a fifth of Home Depot's United States sales, fell about 10 percent, though that was less of a decline than in previous quarters. The most robust categories continued to be tied to do-it-yourself repair and small remodeling projects -- paint, plumbing, flooring, garden, building materials, and kitchen and bath. Sales of items used for décor updates, like vinyl flooring and special-order carpet, were also strong. So were sales of products related to energy efficiency, as consumers hunted for ways to save money.
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.