Home Depot Reports Solid Sales Growth -- 2nd Update
November 17 2015 - 3:24PM
Dow Jones News
By Ezequiel Minaya
Home Depot Inc. continues to show that shoppers are more willing
to spend on upgrading their homes than their wardrobes.
The home-improvement retailer posted a 5.1% sales increase at
stores open more than a year, including a 7.3% gain in the U.S. The
strong showing comes as several retailers like Macy's Inc. and
Nordstrom Inc. have raised concerns about consumer spending heading
into the holiday season.
Those headwinds facing department stores don't appear to be
hurting chains like Home Depot and Lowe's Inc., which reports
third-quarter earnings Wednesday. Home Depot Chief Financial
Officer Carol Tome said Tuesday that home values are increasing,
more homes are changing hands, and more households are being
formed--all trends that work in favor of people spending more at
its stores.
"We're in the space of people improving their homes," Ms. Tome
said in an interview Tuesday. "We're in a good space."
Shares of Home Depot, up 21% so far this year, rose 4% in recent
trading to $125.77.
The comments come as retailers prepare for the busiest shopping
period of the year, and investors have been spooked by comments
from retailers about sales trends and a build up of inventory that
could lead to heavy discounting.
Home Depot and Lowe's see their busiest periods in the spring,
but are still taking part in the holiday frenzy with Black Friday
deals on seasonal decor and appliances.
Overall, for the third quarter, the company posted a profit of
$1.73 billion, up from $1.54 billion a year earlier. Revenue rose
6.4% to $21.82 million. The sales gain was lifted primarily by a
4.4% increase in customer transactions, while the average size of
each purchase rose slightly to $58.03 from $57.55 a year
earlier.
After the quarterly results, Home Depot now sees sales and
earnings rising at the high-end of previous forecasts for the
year.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 17, 2015 15:09 ET (20:09 GMT)
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