Spring is the biggest season for home-improvement retailers, as homeowners and others work on their yards and gardens. While the season started off a bit cold and rainy, weather improved and shoppers headed out to stores to pick up supplies.
The No. 1 home improvement retailer’s quarterly performance beat analysts’ estimates, and the Atlanta company raised its full-year earnings forecast again.
For the three months ended Aug. 3, Home Depot Inc. earned $2.05 billion, or $1.52 per share. A year earlier it earned $1.8 billion, or $1.24 per share.
Analysts surveyed by Zacks Investment Research predicted earnings of $1.44 per share.
Home Depot’s stock gained $2.53, or 3 percent, to $86.12 before the market open.
Revenue climbed nearly 6 percent to $23.81 billion from $22.52 billion. This beat Wall Street’s forecast of $23.57 billion.
Sales at stores open at least a year, a key gauge of a retailer’s health, rose 5.8 percent. In the U.S., the metric increased 6.4 percent.
Sales at stores open at least a year excludes results from stores recently opened or closed.
Aside from the better weather, Home Depot has been helped of late by an improving U.S. housing market. Home prices have started to rise, and there’s been steady job growth and fewer troubled loans dating back to the housing-bubble days. While the housing market has recently had a bit of trouble maintaining that momentum, many home owners are spending more to renovate their homes.
On Tuesday the Commerce Department reports on U.S. home construction in July. The expectation is that construction increased 8.1 percent.
Looking ahead, Home Depot now foresees fiscal 2014 earnings of $4.52 per share. Its prior outlook was for $4.42 per share. Before that, the retailer anticipated earnings of $4.38 per share.
Analysts polled by FactSet expect earnings of $4.41 per share.
The chain maintained its guidance for full-year sales to be up about 4.8 percent from the previous year. Based on 2013’s revenue of $78.81 billion, this implies approximately $82.6 billion. Wall Street predicts $82.5 billion.
Home Depot’s smaller rival Lowe’s Cos. reports its financial results on Wednesday.