The Home Depot on Tuesday reported that fourth quarter revenue rose 7.5% to $23.9 billion, beating the analyst forecast for $23.7 billion cited by Reuters. Same-store sales also rose 7.5% over the year-ago quarter. Same-store sales in the U.S. rose 7.2%, as average ticket rose 5.5% and transactions rose 1.9%, according to an earnings call transcript from Seeking Alpha; that beat the average analyst estimate from Thomson Reuters I/B/E/S for a 6.5% increase, cited by Reuters.
For the fiscal year 2017, revenue rose 6.7% to $100.9 billion from 2016, as total company same-store sales for fiscal 2017 rose 6.8% and same-store sales for U.S. stores rose 6.9% for the year.
Online sales grew 21% in the fourth quarter, 21.5% in fiscal 2017 and now represent 6.7% of total sales, the company also said. Nearly half (46%) of online U.S. orders are picked up in stores, "a testament to the power of our interconnected retail strategy," CEO Craig Menear told analysts on an earnings call.
Last year, Home Depot benefited from assertive moves to boost relationships with professionals in the construction industry as well as do-it-yourselfers, and a strong housing market helped too. In the fourth quarter, hurricanes, also played a role — spurring repair-related sales while also taking a bite on the expense side, executives said Tuesday.
That made its results difficult to beat in its late quarter, but the home improvement retailer managed it, and that’s likely to continue, GlobalData Retail Managing Director Neil Saunders, told Retail Dive in an email.
"While [its] figures are slightly weaker than last quarter, they remain well above average — mostly because Home Depot is still getting some benefit from the ongoing rebuilding work after the natural disasters," he said. "In our view, this advantage will continue to have a tangible impact into the next quarter, before dissipating."
Although it’s not a traditional gift destination, the company did well at the holidays, selling more decorations and household holiday accessories thanks to improved marketing and in-store execution, Saunders also said.
Home Depot's moves are offensive rather than defensive, noted Gordon Haskett analyst Chuck Grom in an email to Retail Dive. "Said differently, [Home Depot] continues to take steps to stay ahead of its competition, which should translate into continued market share gains and likely upside to its 4.5%-6% [same-store sales] view through 2020."
In December, the retailer acquired The Company Store, a catalog and e-commerce retailer of home goods and textiles, from owner Hanover Direct. That same month the company reportedly had its eye on logistics and trucking firm XPO, which provides services for several large retailers.
But it’s the strong economy and robust housing market that has provided Home Depot with an environment allowing for its success — and that, too, is poised to continue by fueling demand. "Our survey data shows that more people are planning big improvement projects this year than last," Saunders said. "We believe that Home Depot will be the main beneficiary of this trend."