Home Depot Q1 Profit Climbs On Higher Comps, Lifts Earnings Forecast

(RTTNews) - Home improvement retailer Home Depot Inc. (HD) reported Tuesday higher profit in its first quarter, benefited by higher comparable store sales. Meanwhile, top line missed analysts' estimates, despite a growth. Further, the company lifted its fiscal 2014 earnings forecast and reaffirmed its sales growth view.

In pre-market activity, Home Depot stock is losing $1.50 or 1.96 percent, and trading at $75.

Chairman and CEO Frank Blake said, "The first quarter was impacted by a slow start to the spring selling season. But we had solid results in non-weather impacted markets and expect our sales for the year to grow in line with the guidance we previously provided."

For the first quarter, net earnings grew 12.5 percent to $1.38 billion from last year's $1.23 billion. Earnings per share climbed 20.5 percent to $1.00 from $0.83 a year ago, reflecting a 6.9 percent drop in share count.

The latest quarter results reflected a benefit to earnings of $61 million or $0.04 per share, related to the sale of a portion of the company's equity ownership in HD Supply Holdings, Inc.

On average, 27 analysts polled by Thomson Reuters expected earnings of $0.99 per share for the quarter. Analysts' estimates typically exclude one-time items.

Total net sales for the quarter were $19.69 billion, a 2.9 percent increase from $19.12 billion in the previous year. Analysts estimated revenues of $19.95 billion for the quarter.

Comparable-store sales increased 2.6 percent, and comp sales for the U.S. stores grew 3.3 percent.

In the quarter, the number of customer transactions increased 2.2 percent from last year, and average ticket- actual edged up 0.6 percent to $57.59.

At the end of the first quarter, the company operated a total of 2,263 retail stores.

Looking ahead for fiscal 2014, Home Depot now projects earnings per share to be up around 17.6 percent to $4.42 for the year. The company previously projected full-year earnings-per-share growth of approximately 16.5 percent to $4.38, after anticipated share repurchases of about $5 billion.

The latest forecast includes the $0.04 per share benefit pertaining to the sale of HD Supply common stock, the benefit of it's share repurchases and the firm's intent to buy back $3.75 billion in additional shares over the remainder of the year.

For the year, the company continues to expect sales to grow nearly 4.8 percent from fiscal 2013. Analysts project earnings per share of $4.42 for the year on sales of $82.65 billion.

The company earlier said it expects comparable store sales growth of about 4.6 percent, flat gross margin, and operating margin expansion of approximately 70 basis points for the full year.