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The Home Depot is an exceptionally well-run business, but it is facing broader issues that impact the larger economy—especially home builders, suppliers, and remodelers. We expect the company’s earnings call, scheduled for Aug. 15, to be enlightening and to touch on several key economic issues. You should pay attention, even if you ignored their calls in the past or are in a different industry.

Shifts in the Consumer Wallet

To say The Home Depot is relevant is an understatement. With nearly $160 billion in revenue, The Home Depot measures its revenue as share of personal consumption expenditure (as in: two-thirds of GDP).

However, consumers are now shifting how they spend on their homes, especially in the past six months. Compared with the same time last year, U.S. Bureau of Economic Analysis data shows consumers are shifting to buying more interior products like furniture and decor, while at the same time cutting back on spending on outdoor equipment (down -11% in volume). Perhaps it’s not by accident that The Home Depot’s digital presence is looking more threatening to Ikea and other decor competitors.

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