Home Depot reported a 14% jump in fiscal second-quarter profit, as the home-improvement retailer benefited from a strong spring rebound after the severe winter delayed some sales earlier in the year.
Results for the quarter easily exceeded expectations, bolstered by a 6.4% jump in U.S. same-store sales as Home Depot reported higher customer transactions and greater average ticket sales across its business. Home Depot also raised its full-year earnings forecast.
The strong report from Home Depot (HD) shouldn’t be a complete surprise to investors — executives earlier this year told Wall Street that sales “lost to snow on the ground” in the first quarter would be recorded in the second quarter. Home Depot has said that results in the first half of the year counterbalance each other regardless of weather fluctuations.
Home Depot has reported stronger sales over the past few years, benefiting from a recovering housing market and the company’s own internal efforts to improve customer service and revamp its supply chain.
Investors could get a better sense of the housing market’s fundamentals this week with a slew of data. It has already been reported that American homebuilders’ confidence in the housing market has hit a seven-month high, and new-home construction and existing-home sales data is also due this week. Peer Lowe’s (LOW) reports its quarterly results on Wednesday.
For the quarter ended Aug. 3, Home Depot reported a profit of $2.05 billion, or $1.52 a share, up from $1.8 billion, or $1.24 a share, a year earlier. Net sales jumped 5.7% to $23.81 billion.
Analysts surveyed by Bloomberg News had projected a profit of $1.44 a share on $23.59 billion in revenue.