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Home Depot tops profit, comp sales estimates; raises forecast

Posted by: Admin | Posted on: August 15th, 2017 | 0 Comments

(Reuters) – Home Depot Inc’s (HD.N) quarterly profit and comparable sales beat Street estimates as homeowners continued to invest in their homes that are appreciating in value.

The No. 1 U.S. home improvement chain also on Tuesday raised its full-year sales and profit forecasts.

Americans have been spending more on their homes as property prices are on the rise in a subdued U.S. housing market, which is facing a supply crunch.

Home Depot had previously called out price appreciation as one of the primary motivators for people to invest in their homes.

The company on Tuesday said it now expects full-year sales to grow 5.3 percent, comparable sales to rise 5.5 percent and earnings of $7.29 per share for the year ending January.

It had previously forecast sales to grow 4.6 percent, comparable sales to rise 4.6 percent and earnings of $7.15 per share.

The number of customer transactions was up 2.7 percent in the second quarter ended July 30, while the average ticket value rose 3.6 percent to $63.05.

“We also believe an extended Spring season was positive for Home Depot’s outdoor business in 2Q, including outdoor garden,” BTIG Research analyst Alan Rifkin said in a pre-earnings note.

Sales at stores open for more than a year rose 6.3 percent, above the 4.9 percent growth expected by analysts polled by research firm Consensus Metrix. Comparable sales at U.S. stores increased 6.6 percent.

Net income rose to $2.67 billion, or $2.25 per share, in the second quarter ended July 30, from $2.44 billion, or $1.97 per share, a year earlier.

Net sales rose 6.2 percent to $28.11 billion, the highest quarterly sales in company history, Home Depot said.

Analysts on average had expected earnings of $2.22 per share on revenue of $27.84 billion, according to Thomson Reuters I/B/E/S.

Home Depot’s shares were little changed in premaket trading on Tuesday. Up to Monday’s close, the stock had risen 15 percent this year.

Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Martina D’Couto

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