American shoppers shrugged off pre-election jitters and spent more on home-improvement projects, sporting goods and off-price clothing, a promising sign ahead of the key holiday shopping season.
Home Depot Inc., Dicks Sporting Goods Inc. and TJX Cos. on Tuesday all logged strong sales growth in the third quarter, with gains of at least 5% at existing stores from the year before. The results came as the Commerce Department said total retail sales rose 0.8% in October from a month earlier. With a revision in the September data, national retail sales clocked their best two-month performance in at least two years.
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The data suggests a healthy profile for the U.S. retail industry just 10 days before Black Friday, the day after Thanksgiving that marks the unofficial kickoff for the holiday shopping season. Retailers have delayed their holiday marketing push due to the long, bitter presidential election that ended a week ago with a win by President-elect Donald Trump.
Now that the election is over and airwaves are freed up to advertise more, retailers are in a race to log as many sales as possible before Christmas, a stretch that can make or break a retailer's financials for the year. The National Retail Federation estimates sales over the period will rise 3.6% versus a year ago.
Largely, the earnings reports Tuesday from three large chains show the continuation of outside trends that have buoyed results. However, shares of all three companies fell in early Tuesday trading, after rallying in the wake of the election. Later this week investors will get another measure of spending when Wal-Mart Stores Inc. and Target Corp. report their latest results.
While some retailers thrive with tailwinds like a rising housing market or a competitor's bankruptcy, pockets of weakness remain. Department stores like Macy's Inc., Kohl's Corp. and J.C. Penney Co. posted sales declines in their recent quarters and some big-box retailers like Target are struggling to attract shoppers. Online shopping is also posing a major competition, siphoning off shopping trips to physical stores.
Home Depot's third-quarter sales rose 5.5% at existing stores, including 5.9% in the U.S. The rise in housing prices has made homeowners more willing to spend on projects like bathroom remodels and roof replacements. Earnings rose 14% to nearly $2 billion, helped by a rising value of each transaction. The number of transactions totaling more than $900 rose 11.3% in the quarter, showing shoppers' willingness to spend on big projects.
"We believe home price appreciation, housing turnover, household formation and the aging housing stock in the U.S. continue to support growth in our business," Chief Executive Craig Menear said on Tuesday's earnings call.
The company is also winning over more professional customers with enhanced credit offers and improved delivery services. It raised its earnings outlook slightly for the year and still expects sales to rise 6.3%. It doesn't see a let up in the trends that have been at its back.
TJX Cos., owner of T.J. Maxx and Marshalls, relayed a similarly optimistic message saying more shoppers came to its stores to hunt through its off-price goods driving up sales.
"We are convinced that we are gaining consumer market share across all of our divisions," Chief Executive Ernie Herrman said in a release. The retailer, which opened 110 new stores in the period, reported a 6.3% drop in net income to $549.8 million as financial charges on debt and pensions eroded its 6.9% rise in total sales.
Meanwhile, sports retailer Dick's said sales rose 5.2% at existing stores, as it picked up market share in the wake of the bankruptcy of rival Sports Authority.
"Looking ahead onto the fourth quarter, we are confident our assortment and marketing will help us to continue to capture displaced market share this holiday," Chief Executive Edward Stack said.
Dick's raised its outlook for the year helped by new stores it acquired from rivals in bankruptcy, forecasting same-store sales rising between 3% and 6% in the current quarter.
Its profit forecast fell short of analyst expectations and shares fell 8.8% in morning trading.
Suzanne Kapner and Sara Germano contributed to this article.
Write to Paul Ziobro at Paul.Ziobro@wsj.com