Home Depot lifts profit forecast as housing market strengthens
Reuters
Published Aug 16, 2016 06:58AM ET
Home Depot lifts profit forecast as housing market strengthens
(Reuters) - Home Depot Inc (N:HD) raised its full-year earnings forecast after reporting a 6.6 percent rise in quarterly sales as customers spent more in a strong housing market.
Home Depot and smaller rival Lowe's Cos Inc (N:LOW) have benefited as consumers cut back spending on items such as apparel and accessories and instead spend more on houses and renovating and redecorating their homes.
"Housing continues to be a tailwind for our business," Home Depot Chief Executive Craig Menear said in a statement.
Low interest rates and a strengthening labor market are driving the housing sector. Home resales hit more than nine-year highs in May and June. July data will be released next week.
Sales at Home Depot stores open more than a year rose 4.7 percent, matching the average analysts' estimate, according to research firm Consensus Metrix. Comparable sales at U.S. stores rose 5.4 percent.
The company's net income rose to $2.44 billion, or $1.97 per share, in the second quarter ended July 31 from $2.23 billion, or $1.73 per share, a year earlier.
Net sales of the world's biggest home improvement chain rose to $26.47 billion from $24.83 billion.
Analysts on average had expected earnings of $1.97 per share on revenue of $26.49 billion, according to Thomson Reuters I/B/E/S.
The company said it now expected earnings of $6.31 per share for the year ending January, up from its previous forecast of $6.27.
Home Depot's shares were slightly down in premarket trading. Up to Monday's close of $137.06, its shares had risen 14.5 percent in the past year.
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Written By: Reuters
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