The Home Depot Inc. (NYSE: HD) reported on Tuesday that its fiscal first-quarter profit rose 18% thanks to strong growth both in the revenue and comparable-store-sales.
Both earnings and revenue topped analysts’ expectation.
Home Depot’s Chief Executive Frank Blake attributed this to ongoing recovery in the U.S. housing market.
The Company also upwardly revised its full-year guidance. For the current fiscal year, Home Depot expects earnings of $3.52 a share, assuming a revenue growth of 2.8%. Earlier the Company provided earnings guidance of $3.37 a share, on assumption that revenue would grow by 2%. In the preceding year, Home Depot upwardly revised its guidance for three times.
Mr. Blake said that the Company had to encounter bad weather in the recently concluded quarter; still the CEO said that no damage was done as significantly improving housing market helped driving up the revenue.
For the fiscal first quarter ended May 5, the Atlanta GA based Company reported net income of $1.22 billion or 83 cents a share compared to a net income of $1.04 billion or 68 cents a share, in the year-earlier quarter. Sales climbed 7.4% to $19.1 billion, in the fiscal first quarter.
Analysts’ consensus estimate was for earnings of 77 cents a share on sales of $18.69 billion, according to a data compiled by Thomson Reuters.
Gross margin for the period improved to 34.9% from 34.7% even as input costs increased 7.1% in the fiscal first quarter.
Same-store-sales, a key gauge on retail chain’s performance as it strips sales impact from stores opened or shuttered in last 12 months, rose 4.3%. In the U.S. it increased by 4.8%.
Average ticket price also rose 5% to $57.24 from $55.51, in the year earlier quarter.
Just like any other home refurbishing products making company, Home Depot also reeled under pressure after the U.S. housing boom ended in 2008. In order to reposition itself and stay ahead of the competition amid slow recovery, Home Depot took several strategic decisions which included, improvement in the supply chain management, overhaul in merchandises assortment and more personalized attention to customers by training its workforce.
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