Home Depot reported second-quarter earnings and sales that far exceeded expectations, enjoying the benefits of a warmer start to the summer.
The home improvement seller had a floundering spring season. Now it raised its outlook for revenue and same-store sales for the whole year, stating the number of costumer transactions increased during the quarter, adding that consumers were spending more at its stores.
Home Depot shares increased less than 1 percent in early trading in the news.
The company’s earnings per share was at $3.05, which was way above the $2.84 that was expected by the market. Its revenue was at $30.46 billion, higher than the $30.03 billion expectations. Same-store sales perked up 8 percent worldwide, also higher than the expected 6.6 percent.
The spring was chilly in most of the United States, compelling many homeowners to push back their gardening and remodeling projects into summer. In spite of the headwinds, consumers are still investing their properties to see prices go up.
“If you are a homeowner and your home is continuing to go up in value, you feel much more comfortable investing back in that home,” said Oppenheimer analyst Brian Nagel.
Sales of per-square-foot basis rose 8.6 percent in the quarter, said the retailer. It also stated that the average shopper’s ticket increased 5 percent to $66.20 and customer transactions were higher 3.1 percent overall.
Home Depot sales have speeded up more broadly, a result attributed to the strong housing market in the United States and economic tailwinds. Consumer spending on home improvement items hasn’t moved as much as on apparel, for instance.
During the past quarters, Home Depot was buoyed by homeowners who were trying patch things up following extreme storms like Hurricanes Harvey, Irma, and Maria in 2017.
The Atlanta-based retailer is now concentrated on expanding its professional homebuilder business and believes that by boosting its delivery platform it could take a larger share of this market.
The company stated earlier this year that it plans to whip out $1.2 billion during the next five years to ramp up its supply chain, with the goal of getting online orders to shoppers much faster.
Net income during the second quarter of fiscal 2018 rose to $3.5 billion, or $3.05 per share, compared with $2.7 billion, or $2.25 per share, a year earlier. This result beat Wall Street expectations for earnings of $2.84 per share.
Revenue soared 8.4 percent to $30.46 from a year ago, topping expectations of $30.03 billion. That included online sales growth of approximately 26 percent.
Same-store sales were higher 8 percent globally, surpassing expectations for a 6.6 percent increase. In the United States, same-store sales gained 8.1 percent, again topping the expected 6.4 percent growth.
“As expected, the majority of seasonal sales we missed in the first quarter were recovered in the second quarter,” said the company’s CEO Craig Menear during a conference call with investors and analysts. “Customers continue to respond to ongoing investments and enhancement we are making in support of the customer experience.”
BWorldFinance is your primary source of news in the financial market, technology, and more. Visit bworldfinance.com now and get the latest happenings in the market. Register an account now and begin your investing journey!