Home Depot beat quarterly profit estimates and posted a lower-than-expected drop in comparable sales Tuesday, as the top U.S. home-improvement retailer tapped into a switch by customers to small-scale projects and essential repair work.

U.S. consumers have put big renovations and discretionary home-improvement projects on the back burner as they battle sticky inflation, higher interest rates and lingering caution around the economy.

“We saw continued customer engagement with smaller projects, and experienced pressure in certain big-ticket, discretionary categories,” CEO Ted Decker said.

Customer transactions fell 2.4% in the third quarter, logging their 10th straight quarterly decline, while average spending at stores also dipped slightly.

Still, comparable sales declined 3.1% for the three months ended Oct. 29, smaller than the 3.31% drop analysts expected. Per-share profit of $3.81 topped estimates of $3.76.

The sales beat was “a sigh of relief,” said Sarah Henry, managing director and portfolio manager at Logan Capital Management.

Despite expectations for sales declines next year, investors are “willing to wait a few quarters to see Home Depot resume growth again,” Henry added.

The company’s shares, down 8.8% this year, rose about 3% premarket.

“With continued pressure in certain big-ticket discretionary categories and a trend to smaller projects, HD took the conservative approach – which we agree with,” Evercore analyst Greg Melich said.

Home Depot tightened its annual sales forecast range to a decline between 3% and 4%, compared with its prior forecast for a 2% to 5% decrease.

It now expects annual per-share profit to fall 9% to 11%, compared with a 7% to 13% slump estimated previously.

“Unless housing turnover improves, we have muted expectations going into 2024. I don’t know if you’re going to see the same level of decline that we’ve seen this year … but the general consumer and sales will remain soft and under pressure,” M Science analyst John Tomlinson said.

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