Home Depot stock held firm Tuesday morning despite the company cutting its full-year profit guidance and same-store sales forecast. Yet, more shoppers are visiting its stores, research finds.
In the second quarter, Home Depot's foot traffic increased 1.1% vs. the year-ago period, an improvement from the 0.2% increase in Q1, according to retail expert Placer.ai. Visits in July eased 0.4% year over year, after jumping 4.3% in June.
The home improvement industry has been struggling. LL Flooring just filed for bankruptcy and is shutting dozens of stores.
Still, a large share of shoppers went to both Home Depot and Lowe's in the second quarter. This cross-shopping jump suggests "consumers are again taking on higher-stakes home improvement projects, which justify a visit to both retailers," Placer.ai noted in a report.
Other shopping data for the second quarter:
- Visits rose 3.9% at Walmart and 7.5% at its Sam's Club division in Q2. In June and July, visits were up 7.2% and 3.6% at Walmart, respectively.
- Visits at Lowe's rose only 0.6% year over year, and fell 3% during July after rising 2% in June.
- Target visits increased 2% year over year, with monthly visits increasing 4.7% in July and 8.9% in June.
- Foot traffic increased 12.2% at Costco, and visits were up 9.3% in July and 13.3% in June.
Stock Market Breadth Not So Bad?
The stock market may not be so dependent on the Magnificent Seven and other megacaps. Ned Davis Research says in a report today that while the majority of gains in the S&P 500 and other indexes have come from a handful of megacaps, most stocks have participated, just at a slower pace.
When breadth has narrowed to dangerous levels, it has broadened out again.
With each new high in the S&P 500 this year, fewer stocks were above their 50-day moving averages. But starting July 10, traders rotated out of megacaps and into small and midcaps.
"As a result, by the July 16 record high in the S&P 500, 79% of stocks in our NDR Multi-Cap universe were above their 50-day moving averages, 77% were above their 200-day moving averages, and over 70% of sub-industries were in uptrends," strategists noted.
Even with an 8.5% drop in the S&P 500, nearly 62% of stocks are above their 200-day moving averages.
