Home improvement retailer Home Depot, Inc. (HD) reported Tuesday a higher first-quarter profit as warm weather created improved demand for home renovation products, boosting its sales by about 6 percent. Adjusted earnings matched analysts' estimates, but sales came below their view. Based on its year-to-date performance, the company lifted its guidance for the fiscal ending January 2013.
Frank Blake, chairman and CEO of the company said, "We saw a stronger-than-expected start to the year, driven by record warm weather and continued demand for core products."
Comparable-store sales for the quarter were positive 5.8 percent, with comp sales for U.S. stores growing 6.1 percent.
The company's first-quarter net earnings increased to $1.04 billion or $0.68 per share from $812 million or $0.50 per share reported last year.
Results for the recent quarter included a benefit of $0.03 per share related to termination of the company's guarantee of a senior secured loan. Excluding this item, adjusted earnings for the first quarter were $0.65 per share.
On average, 26 analysts polled by Thomson Reuters expected earnings per share of $0.65 for the quarter. Analysts' estimates typically exclude one-time items.
For the first quarter ended April 29, 2012, the company's net sales grew 5.9 percent to $17.81 billion from $16.82 billion a year ago, but were below analysts' estimate of $17.90 billion.
Looking ahead, for the fiscal ending January 2013, the company now expects earnings growth of about 17 percent to $2.90 per share. Thirty analysts project full-year earnings of $2.91 per share.
Earlier, the company forecast full-year earnings per share growth before share repurchases of around 10 percent to $2.72 and earnings per share after anticipated share repurchases of $2.79.
Sales for the current fiscal year are now anticipated to be up around 4.6 percent on a 53-week basis, while its prior outlook was for sales growth of about 4 percent. The company's last year sales were $70.4 billion.
According to Home Depot, earnings-per-share outlook includes $0.03 per share benefit related to the termination of its guarantee of a senior secured loan, benefit of the company's year-to-date share repurchases and its intent to buy back $2.4 billion in additional shares over the remainder of the year.
At the end of the quarter, the company operated a total of 2,254 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces, Mexico and China.
Home Depot shares closed Monday's regular trading at $49.88 on the NYSE. In the pre-market activity, the shares are down 4.17 percent.
For comments and feedback: editorial@rttnews.com