Home improvement retailer Home Depot Inc. (HD, Financial) posted second-quarter financial results that surpassed estimates for both earnings and revenue on Tuesday morning. There was an increase in the average number of customer transactions and a rise in customer spending at stores as compared to the year-ago quarter.
The company had a lackluster first quarter as a cold and wet spring season compelled customers to postpone outdoor projects, adversely affecting the company.
Snapshot of the second quarter
Home Depot's earnings per share for the quarter came in at $3.05. Quarterly revenue of $30.46 billion grew 8.4% year over year. Online sales grew approximately 26%.
Further, the company registered comps growth of 8%, which was above the consensus estimate of 6.5%. In the U.S., same-store sales jumped 8.1%.
Customer transactions stood at 455.4 million, reflecting a 3.1% increase year over year.
The company’s gross profit was 34% of quarterly sales.
Home Depot’s top-selling categories, namely lumber, indoor garden, outdoor garden and electrical, made up one-fifth of total quarterly sales and increased 10.6% from a year ago.Â
Future plans
The company’s quarterly growth was attributed to the U.S. housing market as well as economic tailwinds. The home improvement company is focusing on its home builder business and strengthening its delivery platform in order to grab a substantial portion of the market share. The company is also working on faster delivery of online orders to customers.Â
"As expected, the majority of seasonal sales we missed in the first quarter were recovered in the second quarter," CEO Craig Menear said. "Customers continue to respond to ongoing investments and enhancements we are making in support of the customer experience."
Guidance
Home Depot projects full-year earnings per share to be $9.42, up from its previous forecast of $9.31. Revenue is expected to grow 7% while, at the same time, it sees comps growth of 5.3%. The company also plans to buy back $6 billion worth of stock this year.Â
Disclosure: I do not hold any positions in the stocks mentioned in this article.
