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Sales for Home Depot Inc. continued their upward trend in the latest quarter, though year-over-year growth slowed in comparison with last summer when the coronavirus pandemic began driving home-improvement spending.

The retailer, which benefited from pandemic-related changes in consumer behavior and federal stimulus payments last year, said that demand has remained strong, but its executives cited supply-chain snags and rising materials prices as challenges. In the latest quarter, comparable sales—a measure that adjusts for stores opening and closing—grew 4.5%, after four consecutive quarters of more than 20% growth.

The more modest sales growth for period ended Aug. 1 has remained steady through the first two weeks of the month even as the Delta variant of the coronavirus has led to rising case counts, Chief Financial Officer Richard McPhail said in an interview. Still, the course of the pandemic remains hard to predict, he added.

“We just don’t know, and we don’t want to speculate," Mr. McPhail said.

The types of projects generating business for the company are evolving, Home Depot executives said. In the three months through July, shopping declined in do-it-yourself categories such as paints and garden supplies. When consumers retreated to their homes last summer during the pandemic, sales for those products surged as people invested more time and money in sprucing up their properties.

Conversely, the latest quarter brought stronger sales for categories that typically depend on professional contracting work, such as lumber, flooring and plumbing supplies. Earlier in the pandemic, consumers put off such projects amid concerns about bringing outsiders into their homes. Home Depot’s comparable sales for big-ticket transactions—those of more than $1,000—rose 24% in the latest period.

The Atlanta-based company’s shares fell by 5.4% Tuesday; but at more than $319 a share, the stock remained about 40% higher than its level in early March 2020, just before the pandemic hit the U.S.

The burst of consumer spending that boosted some of the country’s biggest retailers during the pandemic may be cooling. With the Delta variant spreading, U.S. retail sales fell by 1.1% in July, the Department of Commerce said Tuesday, a reversal from June’s rise.

Walmart Inc. on Tuesday also posted slower sales growth in its latest quarter, and late last month Amazon.com Inc. reported slowing e-commerce sales growth.

Home Depot’s total sales of $41.12 billion for its fiscal second quarter were up from $38.05 billion a year earlier. The number of customer transactions fell about 6%, but the average transaction size grew. A year ago, many people were making more frequent trips to Home Depot to buy pandemic-related supplies such as masks and hand sanitizers, executives said, noting the recent shift to fewer, bigger purchases.

Home Depot’s profit was $4.81 billion, up from $4.33 billion in the year-earlier quarter. On a per-share basis, earnings were $4.53. Analysts were forecasting earnings of $4.36 a share, according to FactSet.

As pandemic-related factors have boosted home-improvement demand, they have also disrupted supply chains and led to higher prices for materials, especially lumber, Home Depot executives said.

“Raw material shortages, production constraints and pressures across modes of transportation are creating a difficult supply-chain environment," Ted Decker, the company’s president, told analysts on a conference call. Those challenges cut into Home Depot’s gross margin—a measure of profitability—in the latest quarter, as did the return of sales promotions that were canceled amid last year’s pubic-health crisis.

This story has been published from a wire agency feed without modifications to the text

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