Ousting winter, spring came bearing gifts for Home Depot in the form of first quarter profit and revenue surpassing the expectations of Wall Street.
While the first quarter proved a struggle for many retailers, this is not the case for Home depot which addresses the needs of home owners and has witnessed store-sales across the U.S. increase for three consecutive quarters.
The Commerce Department released data that proves housing starts make up a market set to thrive at a pace that hasn’t been witnessed since the recession. This is where Home Depot makes a difference.
From March to April alone, building permits peaked 10.1 percent. This is indicative of more homes on the market, respectively, more people looking for what they need on the Home Depot aisles.
Chief Executive Craig Menea commented on the spike:
“The growth that we see in our business … supports the view of the continued recovery in the U.S. housing market”.
It looks like an approximate half of the customers shopping at Home Depot live in homes that are valued above 200,000 dollars. This drives the increased spending of wealthier Americans, which is turn, aids sales.
At the end of the previous year, the home-improvement chain owned 2,270 stores distributed across all 50 states. Home Depot stores are also the to-go place in the District of Colombia, Puerto Rico, U.S. Virgin Islands and Guam. Mexico and ten Canadian provinces also host Home Depot stores. So customers do have their pick.
And they seem to be picking well as Home Depot reported revenue was of 20.89 billion dollars. That is overwhelming over last year’s revenue reported at 19.69 billion dollars. In just the first quarter, Home Depot shares rose from 1 dollar per share during the same period last year to 1.21 dollars per share. That is an earning of 1.58 billion dollars compared to 1.38 billion dollars last year.
With increasing good results, now the expectations are set higher. 2015 earnings are expected to rise in between 11 and 12 percent. That translates into an increase from 5.25 dollars per share to 5.27 dollars per share. Even Wall Street is taken aback with their projections of 5.23 dollars per share earnings toppled by Home Depot in-house analysis.
Overall, revenue increase is projected approximately in between 4.2 percent and 4.8 percent.
The departments that registered the highest performance for Home Depot were tools, décor, lighting, plumbing and appliances.
Image Source: jrn.com
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