Home Depot Inc. (NYSE: HD) posted quarterly earnings Tuesday, besting analysts estimates, and also raising guidance for continued growth during the current quarter.
Excluding special items, the largest home-improvement retailer earned 45 cents for the quarter ended May 2, beating Bloomberg’s mean analysts estimate by 5 cents. Home Depot raised its full-year earnings estimate to $1.88, or a penny more than Wall Street’s expectation.
�Expectations were high going into the quarter as the market anticipated favorable spring weather, government stimulus programs, and supplier data indicating a strong start to the year was under way in seasonal categories,� Wayne Hood, an analyst at BMO Capital Markets, wrote in a note to clients. Hood rates the stock an �underperform.�
Atlanta-based Home Depot said it cut prices on flowers, fertilizers and patio furniture during the quarter, and sold more energy-efficient appliances as a result of government rebates. Larger items sales were disappointing, however, with price tags more than $900 down slightly, Chief Financial Officer Carol Tome said in a Bloomberg telephone interview.
Traffic increased to 323 million for the quarter, up 13 million from last year. Transactions of more than $50 rose 4.7%, said Tome.
Home Depot, which monitors the number of transactions and size of transactions to gauge performance and trends, said the numbers are coming in soft.
�We said the recovery would happen with more transactions than ticket growth in the first half of the year,� added Tome. �Special-order kitchens, which are a big-ticket discretionary project, are still very soft.�
Monday, the U.S.’s second-largest home-improvement retailer Lowe’s said its second-quarter earnings are expected to lag Wall Street’s mean estimate, citing customers fearing job losses and declining housing values.
Home Depot raised revenue guidance to a 3.5% increase year-over-year, up from 2.5% in its previous guidance of Feb. 23., and boosted its full-year earnings guidance to $1.79 per share.
Revenue rose to $16.9 billion for the first quarter, up 4.3% from the equivalent quarter last year. Same-store (open at least one full year) sales increased 4.8%.
Net earnings spiked to $725 million, or 43 cents per share, up from $514 million, or 30 cents per share, for the first quarter of fiscal 2009.
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