Home Depot boosts profit, sales as housing market improves
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
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.
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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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