Home Depot Inc. reported weaker-than-expected quarterly sales as a warm winter prompted many homeowners to take up renovation projects earlier than usual this year, sending shares of the world’s largest home improvement chain down 3 per cent.
Spring is traditionally the biggest selling season of the year for home improvement chains. But this year, homeowners stepped out earlier to take advantage of the unseasonably warm winter weather across the United States.
Sales at Home Depot rose 5.9 per cent to about $17.81-billion (U.S.) in the first quarter ended on April 29, but missed the analysts’ average estimate of $17.96-billion.
Still, net earnings rose to $1.04-billion, or 68 cents a share, from $812-million, or 50 cents a share, a year earlier.
Excluding a benefit from the termination of its guarantee of a senior secured loan, the company earned 65 cents a share, meeting analysts’ estimates, according to Thomson Reuters I/B/E/S.
Home Depot, which has been quicker to cut costs than rival Lowe’s, has benefited as housing demand has picked up in regions where it has a heavy presence. It has also gained from opening more centralized distribution facilities.
Sales at stores open at least a year rose 5.8 per cent globally, including a 6.1 per cent rise in the United States.
The company expects sales to pick up later in the year. It sees fiscal-year sales rising about 4.6 per cent, up from its prior outlook calling for a 4 per cent increase. It raised its profit outlook for the year, forecasting earnings of $2.90 a share.
Lowe’s plans to report its quarterly results next week.
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