Home Depot Inc. (NYSE: HD) announced upbeat fiscal first-quarter earnings on Tuesday morning. The home improvement retailer attributed the solid results to a rise in customer transactions at its stores as Americans plowed money into their homes.
However, same-store sales (a closely watched metric) sharply fell short of expectations as demand for the retailer’s products was dented by unfavorable weather earlier this year.
Customer transactions jumped 3.8% during the quarter, while sales per square foot rose 5.6% in the quarter ended May 5. Shares of the Dow Jones component have rallied about 11.1% this year, while the S&P 500 has added 13.3%. The stock was trading 1.59% lower to $187.82 as of 9:41 a.m. ET.
HD Earnings & Outlook
Home Depot had net income of $2.5 billion, or $2.27 per share in the quarter, compared to $2.4 billion, or $2.08 per share a year earlier. Analysts polled by Refinitiv were calling for adjusted earnings of $2.18 per share.
Revenue came in at $26.381 billion, an increase of 5.7% from the first quarter of last year. On average, analysts surveyed by Refinitiv expected the company to post revenue of $26.378 billion. Sales at stores open at least 12 months globally grew 2.5% while analysts were predicting an increase of 4.2%. The home improvement group said comparable-store sales were up 2.5% in the United States.
Looking ahead, Home Depot is still expecting its full-year earnings to rise 3.1% to $10.03 per share. Revenue is expected to grow 3.3% while comparable-store sales are expected to be up 5%.
Home Depot CEO Comments
“We were pleased with the underlying performance of the core business despite unfavorable weather in February and significant deflation in lumber prices compared to a year ago,” said Craig Menear, chairman, CEO and president.
“Looking ahead, we remain excited about the momentum we are seeing with our strategic investments. As a result of these initiatives, and the current macroeconomic and housing backdrop, today we are reaffirming our sales and earnings guidance for fiscal 2019. I would like to thank our associates for their hard work and continued dedication to our customers.”
Home Depot Profile
Home Depot is the world’s largest home improvement specialty retailer, operating nearly 2,300 warehouse-format stores offering more than 30,000 products in store and 1 million products online in the United States, Canada, and Mexico.
Its stores offer numerous building materials, home improvement products, lawn and garden products, and decor products and provide various services, including home improvement installation services and tool and equipment rentals.
The acquisition of distributor Interline Brands in 2015 allowed Home Depot to enter the maintenance, repair, and operations sector, while the tie-up with Company Store brought textile expertise to the brand.