Home Depot Raises Forecast, Easing Concern on Home Spending
(Bloomberg) -- Home Depot Inc. eased doubts about a slowing home-improvement market, raising its annual sales forecast as quarterly earnings and revenue beat analysts’ estimates.
- Same-store sales rose 4.8 percent in the third quarter, surpassing analysts’ projections. Revenue of $26.3 billion topped estimates.
- Even with some housing indicators softening, home prices have continued to rise, which Home Depot sees as the biggest incentive for people to spend on their properties.
- The world’s largest home-improvement chain showed off its ability to manage an income statement as earnings of $2.51 a share topped estimates for the 18th straight quarter, dating back to the beginning of 2014.
- The company signaled optimism for the rest of the year by raising its full-year sales growth forecast to 7.2 percent, up from its previous outlook for a 7 percent increase.
- Home Depot saw gross margin rise to 34.8 percent -- the highest point in more than four years. It was still lower than analysts’ forecast of 35 percent, however, with higher transportation and raw-material costs likely eating into profitability.
- Home Depot rose as much as 3.7 percent to $186.12 Tuesday before U.S. markets opened.
- For more details on the results, click here.
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