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Home Depot boosts profit, sales as housing market improves

Home Depot boosts profit, sales as housing market improves
A Home Depot store in Glendale. (Reed Saxon / Associated Press)

Spring was waiting in the wings longer than expected, but the recuperating housing market was enough to boost Home Depot Inc.'s first-quarter earnings above Wall Street's expectations.

For the period ended May 5, the largest home-improvement chain in the world said its revenue soared 7.4% to $19.12 billion

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Same-store sales at locations open more than a year got a 4.3% boost. Domestically, that gauge rose 4.8%, driven in part by double-digit lifts in most major markets in California.

The chain of 2,257 stores said profit swelled to $1.2 billion, from $1 billion a year earlier. Earnings per share boomed 22.1% to 83 cents, from 68 cents.

The company said it had finished rolling out a new strategy that allows customers to buy items online and pick them up in physical stores, a tactic that often results in more brick-and-mortar purchases.

An effort to improve online shopping meant that visits to Home Depot's website soared 50% and that mobile traffic more than doubled, the company said.

"In the first quarter, we saw less favorable weather compared to last year, but we continue to see benefit from a recovering housing market that drove a stronger-than-expected start to the year for our business," Chief Executive Frank Blake said in a statement Tuesday.

In mid-May, the Commerce Department said that permits for future construction rose to a nearly five-year high in April, even as housing starts fell 16.5% to the lowest level since November.

Home Depot is extending its optimism through the rest of the year, raising its forecast.

Instead of its previous estimate of $3.37-per-share earnings, the Atlanta-based retailer now expects the measure to hit $3.52. Its predicted sales increase is now 2.8%, up from 2% earlier.

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