Improvements in the U.S. housing market and sales tied to Hurricane Sandy helped Home Depot Inc report a higher-than-expected quarterly profit and outshine rival Lowe's Cos Inc for the 15th straight quarter.
The strong results, announced on Tuesday, prompted the world's largest home improvement chain to forecast higher sales and earnings for the current fiscal year.
Home Depot also raised its quarterly dividend by 34 per cent to 39 cents a share and said it had approved a $17-billion (U.S.) stock repurchase program to replace its previous authorization.
Shares of Home Depot were up 1.6 per cent at $64.95 in trading before the market opened.
The news came the day after Lowe's gave a fiscal-year operating margin outlook that analysts said did little to boost confidence in its turnaround.
Home Depot has been taking market share from Lowe's with the help of lower pricing and better customer service, analysts have said.
The industry leader has also benefited from having more centralized distribution centers and from recent efforts to shift more employees to jobs where they serve customers directly. A return to more locally targeted marketing and merchandising has also helped.
Under Chief Executive Officer Frank Blake, Home Depot was quicker than Lowe's to cut costs in the years after the housing collapse.
A bubble in the U.S. housing market was at the core of the 2007-2009 financial crisis, which started the same year that Blake became CEO. During the housing downturn, Home Depot's sales at established stores fell more than 20 per cent in such markets as Florida and California.
In recent quarters, the company has gotten a boost as housing markets have rebounded in regions where it has a heavy presence.
Home Depot's net earnings rose to $1.0-billion, or 68 cents a share, in the fourth quarter ended on Feb. 3 from $774-million, or 50 cents a share, a year earlier.
Excluding a gain from adjusting a charge for China store closures, the company earned 67 cents a share, while analysts on average expected a profit of 64 cents, according to Thomson Reuters I/B/E/S.
Sales rose 13.9 per cent to $18.2-billion, beating the analysts' average estimate of $17.7-billion.
Sales at stores open at least a year rose 7 per cent, including a 7.1 per cent increase at Home Depot's U.S. stores. This was the 15th straight quarter that the company's same-store sales outpaced those at Lowe's, which had reported a 1.9 per cent rise worldwide and for the United States.
Home Depot said it expected sales to rise about 2 per cent and same-store sales to increase about 3 per cent this fiscal year. It forecast earnings per share of $3.37 after stock repurchases, up about 12 per cent from the previous year.