Home Depot said elevated supply chain costs will continue to weigh on profits in 2022, after recording a decline in gross profit margins for the holiday quarter despite higher prices and resilient consumer demand.
The do-it-yourself frenzy brought on by the coronavirus pandemic has endured, defying expectations that consumers would spend less on home renovations as lockdown restrictions eased. A hot housing market has helped stoke demand for paint, patio furniture and appliances while supporting a recovery for contractors and builders whose businesses ground to a halt in the early days of the pandemic.
At the same time, retailers such as Home Depot are navigating labour shortages and supply chain bottlenecks that have driven up costs tied to wages, shipping and materials, squeezing profits.