Home Depot, Klarna Q2 earnings shed light on strength of the consumer

Home Depot (HD) and buy now, pay later provider Klarna (KLAR) delivered contrasting second-quarter signals about the US consumer. Home Depot reported comparable-sales growth of 1.7%, its strongest result since late 2022 and above expectations of approximately 1% to 1.3%. The increase remains modest, but the improvement is significant against a moribund residential housing market. It suggests conditions may be stabilizing rather than deteriorating. The retailer has been relying more on contractors for certain purchases and promoting smaller projects to consumers. Tariff refunds also provided support. These factors helped offset housing weakness, but the results do not indicate a broad-based consumer boom. Klarna posted a profit, although analysts had expected a loss, while average revenue per active customer rose 24%. However, its total active-customer count was slightly below estimates, and the company reduced its full-year revenue forecast because of foreign-exchange issues. Klarna also warned that transaction volumes could moderate in Germany, even though the US remains its largest market. Leadership added uncertainty. Klarna’s CFO is leaving in what the company described as a planned departure, but the timing appeared to surprise some investors. The company is seeking a New York-based replacement rather than one located in Stockholm. Investors often dislike unexpected management developments, even when financial guidance is maintained. The discussion also recalled L3 Harris, where the CEO stepped down after a conduct review while the company maintained its financial guidance. Klarna’s marketing toward necessities such as rent and utility bills may indicate that lower-end consumers are using buy now, pay later services for essential expenses. That points to financial pressure even as customer monetization improves. Together, the results depict a consumer holding up but remaining vulnerable. Home Depot reflects stabilization amid weak housing demand; Klarna shows stronger customer economics alongside pressure in volumes, currencies and household finances.