Home Depot, the world’s largest home-improvement retailer, has reported its latest quarterly results as investors assess the health of American consumers and the housing market.

The company’s earnings are being closely watched because spending on renovations and large home-improvement projects can provide an important indication of consumer confidence.

The company reported $47.86 billion in quarterly revenue and adjusted earnings of $4.92 per share, exceeding analysts’ expectations.

The stronger-than-expected results helped push Home Depot shares higher in pre-market trading despite continued weakness in the housing market.

Home Depot’s performance comes against a challenging backdrop for the U.S. housing sector.

Higher mortgage rates have made buying and selling homes more expensive, while uncertainty over the economy has caused some consumers to postpone major renovation projects.

For Home Depot, however, demand for smaller home-maintenance projects and essential repairs has helped support sales.

The company also benefits from professional contractors, who account for an important part of its customer base and continue to purchase building and renovation supplies.

Investors will now watch whether the company’s stronger results can continue through the second half of the year.

Home Depot’s performance is particularly important because its sales can provide clues about household spending, construction activity and the broader health of the American consumer.

Source: Investopedia, The Wall Street Journal