Home Depot Inc (NYSE:HD) provided an upbeat forecast after delivering better than expected third quarter earnings this morning, indicating the home improvement warehouse operator is successfully navigating weather and economic headwinds.
The Atlanta-based company reported Q3 adjusted profits of $1.60 per share, which was two cents better than the Wall Street consensus estimate of $1.58. Revenues rose 6.1% from last year to $23.15 billion, also beating out analysts’ view of $23.05 billion.
Comparable store sales, also known as same-store sales or simply “comps,” were up 5.5% in the third quarter, with U.S. store comps rising 5.9%. Comparable sales are perhaps the most important indicator of a retailer’s performance, since they only measure the results from stores open at least 12 months.
Looking ahead, Home Depot forecast 2017 earnings to rise 15.9% from the prior year, which implies EPS of $6.43. That’s up from a previous outlook of $6.31 and would beat Wall Street’s $6.33 estimate. Full-year 2017 revenues are expected to gain 6.3% to $94.1 billion, in-line with analyst forecasts of $94.15 billion.
Home Depot also reiterated its full-year 2016 comparable sales forecast for growth of about 4.9%.
The company commented via press release:
“We experienced balanced sales growth in the quarter driven by an increase in both ticket and transactions, and our continued focus on productivity drove double-digit earnings-per-share growth,” said Craig Menear, chairman, CEO and president. “I would like to thank our associates and suppliers for their hard work and dedication to our customers throughout the quarter, and particularly in the face of Hurricane Matthew and the flooding in Louisiana.”
Home Depot shares rose $1.73 (+1.36%) to $129.40 in premarket trading Tuesday. Prior to today’s report, HD had fallen 3.46% year-to-date, versus a 6.25% rise in the benchmark S&P 500 during the same period.