The home improvement retail giant reported better-than-expected gains in sales and earnings for the first quarter Tuesday and lifted its outlook for the rest of this fiscal year.

Home Depot rival Lowe's (LOW), which will report its first quarter earnings Wednesday, was down about 2%.

Home Depot has gotten off to a rough start this year because investors are concerned about a possible pullback in housing as interest rates and inflation zoom higher.

"The solid performance in the quarter is even more impressive as we were comparing against last year's historic growth and faced a slower start to spring this year," Decker said.

During a conference call with analysts, Decker added that "customers continue to tell us that their homes have never been more important, and project backlogs are very healthy." He said "that the medium- to longer-term underpinnings of demand for home improvement have never been stronger."

Home Depot's solid numbers may help dispel some concerns about an economic slowdown and potential drop in housing prices.