The Home Depot Inc. Tuesday announced first quarter profits that beat analysts' expectations, bringing in $1.8 billion, or $1.44 per share, compared to expectations of $1.33 per share, according to a survey of analysts by Zacks Investment Research.
Revenue increased to $22.76 billion from $20.89 billion year over year, well past the $22.32 billion analysts expected. First quarter same-store sales rose 6.5% worldwide and 7.4% in the U.S.
The home improvement retailer raised its full-year guidance to $6.27 per share, with revenue rising by 6.3% and same-store sales rising 4.9%—up from its previous estimate of earnings of $6.12 to $6.18 per share, with previous estimates for revenue increases of 5.1% to 6% and same-store sales growth between 3.7% to 4.5%.
The unseasonably warm weather that dinged retailers dependent on apparel sales in the quarter has only helped Home Depot, as Americans continue to invest in their homes in a favorable housing environment.
The results are a beam of light in what has otherwise been a bleak quarter of retail sales, with companies including Nordstrom, J.C. Penney, and Kohl's reporting earnings that missed expectations last week. J.C. Penney CEO Marvin Ellison said on Friday that the retailer is looking to shift its merchandise assortment to "less weather-sensitive categories," saying that its "over-reliance" on apparel has hurt the company in recent quarters. This, and the growing prevalence of Amazon, has put apparel retailers in a tough spot.
As The Wall Street Journal points out, Home Depot and rival Lowe's are also facing rising competition from Amazon, but their vast assortment of items not sold, or are hard to sell, on the e-commerce site (think mulch, kitchen cabinets, and flowers for the yard) help protect them. Home prices are also rising as more consumers pour money into home improvements and more people are moving, proving favorable for Home Depot.
Shares of the company were up 2.5% on the news in premarket on Tuesday. Home Depot shares have risen 12% over the past three months.
“We were pleased with our stronger than expected start to the year, driven by solid execution and broad-based growth across the store,” chairman/CEO/president Craig Menear said in a statement. “This was made possible by our hard working associates and their continued dedication to our customers in a quarter marked by week-to-week demand spikes caused by weather variability.”