Home Depot third-quarter sales beat amid U.S. housing recovery
By Nandita Bose and Sruthi Ramakrishnan (Reuters) - Home Depot Inc on Tuesday reported a better-than-expected rise in quarterly sales at stores open at least a year and said full-year profit and same-store sales would be at the top end of its forecast. Shares of the world's biggest home improvement retailer rose 3.4 percent to $125.07. "Consensus U.S GDP growth projections have moderated (in 2015) but we continue to see positive signs in the housing data with home price appreciation and housing turnover being key drivers of growth for our business," Chief Executive Officer Craig Menear said on an earnings conference call. The U.S. housing recovery has been gaining traction, with homebuilder sentiment hitting decade highs in July, August and September, according to the National Association of Home Builders. Builders' confidence rose to a near 10-year high in October, according to a survey released last month. All of Home Depot's merchandising departments, including appliances, tools and plumbing, posted comparable-sales growth from a year ago. Categories like outdoor garden, electrical, millwork and lumber grew but were below the company average. Same-store sales rose 5.1 percent in the third quarter ended Nov. 1, above the 4.6 percent rate expected by analysts polled by research firm Consensus Metrix. Comparable sales at its U.S. stores were up 7.3 percent, comfortably ahead of analysts' average estimate of 5.9 percent, helped by strong demand from retail customers as well as professional contractors and builders. Menear said the retailer posted growth in the size per transaction in the third quarter, with transactions over $900 rising nearly 8 percent from a year ago. The company expects overall same-store sales to increase 4.9 percent in the year ending January. Online sales rose approximately 25 percent and represented about 5.1 percent of overall sales. About 42 percent of all online orders were picked up in stores, Menear said. Quarterly net income jumped 12.2 percent to $1.73 billion, or $1.35 per share, from the same period a year ago. Excluding items like currency fluctuations, it earned $1.36 per share, topping the average estimate of $1.32, according to Thomson Reuters I/B/E/S. Net sales rose 6.4 percent to $21.82 billion. Analysts, on average, expected $21.83 billion. The company expects full-year earnings of $5.36 per share. Analysts looked for $5.31 per share. Smaller rival Lowe's Cos Inc , scheduled to report on Wednesday, is also expected to do well. (Reporting by Nandita Bose in Chicago and Sruthi Ramakrishnan in Bengaluru; Editing by Savio D'Souza and Jeffrey Benkoe)
